Black Company Aims To Offer Mobile Banking Services To 100,000 People By Next
After helping raise a fresh $12 million round of financing, Wole Coaxum is equipped to grow his business to offer mobile banking services more vigorously to scores of Black Americans.
His company, Mobility Capital Finance Inc. (known as MoCaFi), is a fintech startup and app geared to help close the inequality in the nation’s wealth gap. Its mission includes assisting people to obtain low-cost services, build credit, and help financially underserved communities gain access to capital.
MoCaFi aims to achieve that by offering a debit Mastercard, mobile check deposits, free bill pay, and other services. Coaxum says the services are needed as African Americans and Hispanics spend 50% to 100% more on monthly basic banking services than other racial groups, costing them $40,000 in excess fees over a lifetime.
The MoCaFi expansion comes as the firm’s founder and CEO Coaxum is developing concepts to battle an ongoing problem of people of color often not getting vital banking services. They are among people that often rely on non-traditional or alternative financial services, including costly check cashiers, pawnshops, and payday lenders to tend to their finances.
“We want to disrupt that $196 billion industry,” Coaxum says. “If we’re able to get people on our platform and encourage them to use our services, they now can have a safe place to keep their money, make it easier to put cash into their accounts and participate in the digital economy.”
Simultaneously, the police shootings last year of multiple African Americans including George Floyd, along with legions of Black businesses being forced to close or nearly shut down due to the pandemic, is fueling the need for new options. Reports show the number of Black businesses dropped by 41% from February to April 2020. Contrarily, the number of white business owners dipped by 17%.
Hoping to help curtail the discrepancy, MoCaFi in March reported it raised $12 million in Series A round financing, including $2 million from credit card and technology payment giant Mastercard. Of the remaining $10 million, about half came from new investors, including an undisclosed amount from Citi. The other half is from existing investors. The funding will allow MoCaFi to expand into several major cities in the upcoming months by providing financial products to people of color.
Coaxum told BLACK ENTERPRISE that the money will be used to operate at scale. He says that means making investments in all areas of the business, including hiring more salespeople, investing in technology to enhance its platform, and boosting marketing efforts.
With that, Coaxum has large growth goals. The former Wall Street executive with a seasoned financial services background wants to see 100,000 people on MoCaFi’s platform a year from now. That would be a significant increase from 25,000 customers the Black-owned company has currently.
“That’s why we’re partnering with all of these cities, and we have our own consumer direct marketing strategy,” Coaxum says, reflecting on where the customer gain will largely come from.
All told capital-wise, MoCaFi has raised $19 million in three rounds of financing with contributions coming from the likes of investment banks and friends and family since Coaxum started the firm based in Harlem, New York, and Newark, New Jersey in 2016.
After serving as a managing director from 2006 to 2015 at JPMorgan Chase in digital sales, Coaxum was compelled to start MoCaFi after unarmed Black teenager Michael Brown was fatally shot in 2014 by a white police officer in Ferguson, Missouri. Coaxum says that injustice was the impetus to use his time, talent, and resources to help solve the nation’s racial wealth gap. “I would rather have the legacy of trying to fulfill that than retiring with a gold watch from JPMorgan.”
A Cleveland native, Coaxum grew up in a family with a strong background tied to civil rights. Plus, his entrepreneurial great…
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