Multilingual Neobank Startup Fair Raises $20 Million
The multilingual neobank startup Fair raised $20 million in less than 40 days and is preparing to launch to the general public in April, with early bird memberships available in March, the company said in a press release on Tuesday (Feb. 9). The backers were not disclosed.
The membership-based FinTech, which is headquartered in Houston, Texas, strives to offer ethical banking and financial services.
“Our fundraising success is partially attributed to the need for a platform like Fair,” said Khalid Parekh, founder and CEO. “Research tells us Blacks and Latinos pay twice as much in bank fees, while the racial wealth gap continues to grow.” He added that people are struggling “at the hands of our current financial model,” and that Fair was created “to help all consumers keep more money in their pocket, so they can thrive. It’s why our purpose and promise are in our name.”
Parekh came to the U.S. from India “with $100 in his pocket” some 20 years ago. At the time, he found it difficult to open a bank account or get a loan. He created Fair to serve newcomers to the U.S. who don’t yet have credit. He said Fair “prides itself” on ethical, transparent banking. Because it operates on a membership model, there are no bank fees.
“In addition to fixing the banking practices that cost all of us, as an immigrant entrepreneur, I saw how the opportunity gap can limit advancement,” Parekh said. “Understanding complex fee structures and the fine print is difficult for many people born in the U.S. Qualifying for a business loan is impossible for an immigrant with no credit history. Falling into a cycle of debt is inevitable with high-interest loans. Part of the vision for Fair is to address these inequities.”
Fair practices socially responsible investing (SRI), an investment strategy that avoids companies considered to have a negative social impact. The startup also practices environmental, social and corporate governance (ESG) investing, which focuses on sustainability. Fair will also donate 2.5 percent of profits to worldwide refugee causes.
Parekh is also the founder of the $350 million tech company AMSYS Group.
The November 2020 Disbursements Tracker by PYMNTS, in conjunction with Ingo Money, indicated that financial institutions can help the unbanked and others suffering from financial setbacks by offering digital and mobile options.