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Bee Raises $4.6M to Deliver Banking Services for Anyone
By Lora Kolodny
November 30, 2015
Banking startup Bee, incorporated as One Financial Holdings Inc., has raised $4.6 million in two rounds of seed funding.
New York-based Bee provides bank accounts, debit cards and financial services that are aimed at people who live in low- and middle-income neighborhoods.
Its two rounds of seed funding include its most recent $2.65 million led by AXA Strategic Ventures , which comes after its first, led by Blumberg Capital in 2014.
Bee offers account holders no minimum balance requirements, no overdraft fees, availability of funds within a half-hour from deposits made via check photo through its mobile app and cash withdrawals at any ATM, twice a month free.
"Typical fees can add up for people who live on a tight budget and have a regular savings or checking account. Fees and minimums can even prevent people from opening a bank account," said Chief Executive and co-founder Vinay Patel.
Features like unlimited ATM withdrawals from bank ATMs or free withdrawals at a bank branch can end up costing people if they have to take a subway ride to reach a bank ATM, the CEO said.
"If you walk around downtown Brooklyn, Bed-Stuy, or Grand Concourse in the Bronx, you don't see bank ATMs or branches. Those are 25 blocks away."
To win new customers, Bee has been setting up pop-up banks, or kiosks with customer service staff, in neighborhoods around New York that lack other bank branches and ATMs.
The startup has 10 full-time employees and between 10 and 20 field staff at its pop-up branches on most days, the CEO said.
The company plans to use its seed money to expand to San Francisco, Oakland and Los Angeles, while continuing to grow its customer base in New York City.
AXA Strategic Ventures' Drew Aldrich, a Bee investor, said longer-term, investors expect the company to expand into different financial services.
The company could easily make small loans, the kind that traditional banks don't offer, to customers who need $300 for a car repair or $500 to outfit children with everything at the start of the school year, the investor said.
"Too many people are reliant on payday loans today," Mr. Aldrich said, "And some banks just don't want to deal with evaluating risk in this market. But Bee will have knowledge of deposits and transaction data firsthand and will know which customers are a good risk."
Bee competes with many banks that have a mobile offering, including Simple, now owned by BBVA , Eastman Credit Union , VyStar Credit Union , CapitalOne and WellsFargo.
Other investors in Bee's seed round included T5 Capital, Fenway Summer Ventures, Funders Guild and Blue Seed Capital.
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