Neobanking startup Zolve has secured a warehouse debt facility of up to $100 million from Community Investment Management (CIM).
Founded in August 2021 by Raghunandan G, Zolve offers financial services to immigrants in the US, providing access to various banking facilities without requiring an SSN or US credit history while they are still in their home countries.
The startup claims to have attracted around 500,000 users and facilitated more than $600 million in transactions.
Warehouse financing is a loan provided by a financial institution to a company, using the company’s inventory as collateral.
What is the purpose of fundraising?
According to the company’s statement, the raised capital will be utilized towards providing credit products to US migrants. Additionally, the funding will be used to expand its operations and offer a wide array of financial services to immigrants moving to the UK, Canada, and Australia.
Zolve said it aims to empower individuals from various geographical locations and demographic backgrounds in their financial journeys in the United States and other popular destinations among Indian immigrants.
What has Zolve achieved so far?
Since its inception, Zolve has raised $15 million in seed funding and an additional $40 million in a Series A funding round. The startup claims a 12-month customer retention rate of more than 86% and has facilitated transactions worth more than $600 million.
With $55 million in equity funding since its inception and now access to $100 million in debt funding, Zolve aims to expand its reach and innovate its offerings in the financial sector for immigrants.
The current landscape of the neobanking sector
The neobanking sector, which has disrupted the global banking industry in recent years, is particularly noteworthy for its user-centric financial services, offering customers access to free instant payments, affordable money conversion, and savings and investment tools through intuitive apps.
This is a stark contrast to the often cumbersome and expensive processes of traditional banks a decade ago. Neobanking forecasts for the next five years reveal significant figures, with global transactions expected to reach over $9 trillion by 2027, which is three times that of 2022, and the number of users predicted to double in the same period.
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