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Kenji Niwa, an immigrant entrepreneur, skilled the challenges of getting monetary merchandise, together with a bank card, with out a credit score historical past when he moved to the U.S. in 2017 to get his MBA at UC Berkeley. Niwa realized that the difficulty isn’t just for worldwide college students who endure monetary stress within the U.S. — native school college students had been additionally coping with the identical downside because of poor credit score scores.
“[About] 50% of faculty college students shouldn’t have a bank card as a result of they’re afraid of overspending and utility rejection,” Niwa, CEO of Firstcard, advised TechCrunch. “Twenty-nine % of Gen Z customers don’t have a credit score rating or don’t know if they’ve one,” Niwa added, citing a latest research by FICO.
Niwa and CTO Daniel Junqueira co-founded Firstcard in 2020 for home and worldwide school college students to supply a collection of economic merchandise that assist them construct higher credit score and succeed of their monetary journey. The three-year-old outfit mentioned at the moment it has raised a $4.7 million seed spherical, which brings its complete raised to $7.7 million.
“We imagine {that a} good credit score rating is an important prerequisite for college kids’ monetary future and everybody ought to have equal entry to finance merchandise, with or with out credit score historical past,” Niwa says.
As its first step, the startup launched a debit card, Credit score Builder Card, this month, initially for college kids out of Stanford and UC Berkeley.
Firstcard affords a checking account for college kids, permitting them to earn money again at greater than 29,000 choose hyperlocal retailers as much as 15%. The debit card has no annual charges and doesn’t require minimal deposits or credit score historical past. The startup says customers can earn financial savings with a 1.25% annual proportion yield (APY) with Firstcard and as much as 4.25% APY with Firstcard Plus.
On prime of that, Firstcard intends to construct communities for faculty college students and plans to supply monetary help and pupil loans sooner or later. “We see that the credit score situation is the epitome of the bigger downside of a scarcity of economic instruments and training for college kids,” the CEO says. “Solely 22 states require college students to take monetary literacy programs, leaving many college students unprepared to handle their very own funds popping out of faculty.”
The startup’s upcoming options will embody a man-made intelligence-powered monetary advisor software to allow customers to save cash and construct credit score by analyzing their monetary habits and providing options to earn bonus APY for financial savings. Furthermore, it would present monetary training content material.
Opponents within the fintech trade embody neobanks. Although a few of the friends supply credit score choices like cashback or APY, they’re decrease than Firstcard, Niwa says.
It’ll monetize in 3 ways: interchange charges, a $3 month-to-month subscription charge for Firstcard Plus customers and curiosity income of unsecured bank cards, which isn’t launched but.
Firsthand is just not Niwa’s first startup. Earlier than transferring to the U.S., Niwa had offered his earlier firm, i Tank Japan, a human useful resource platform that gives internship and job data for faculty college students, in 2015.
The corporate will use the proceeds to double down on its product improvement and advertising.
The newest spherical included angel traders and enterprise capital corporations, together with AngelList Early Stage Quant Fund, CyberAgent Capital, East Enterprise and Japanese soccer participant Keisuke Honda participated in its earlier funding.
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