Comun, a neobank founded by Latinos for the Latino community, closed a $4.5 million seed funding, the company announced Tuesday.
The funding led by Costanoa Ventures, along with South Park Commons and FJ Labs, aims to build a Spanish-first digital banking experience for the Latino community in U.S.
“We built Comun to make it easier to thrive as an immigrant family in the U.S.,” said Andres Santos, co-founder and CEO of Comun. “Banking is a gateway to accessing many services that are vital to a person’s livelihood. My co-founder and I both experienced how challenging it can be to navigate the banking system as immigrants. Our goal is to empower families to be successful in both their finances and in the U.S. with a financial partner that they can trust and understand.”
The challenger bank provides all the basic traditional banking services without having the applicants require a Social Security number — they can use their taxpayer identification number or a foreign passport, or any other form of a foreign identification document to sign up.
Founded by Abiel Gutierrez and Santos, who came to pursue higher education in the United States from Mexico, Comun offers essential financial services to the Latino community at no extra fees.
The underlying banking services offered by Comun are provided by Piermont Bank in New York, according to the company’s website.
Comparatively new in the market, the challenger bank is working with nonprofits, business-to-business companies and consulates that support or serve the Latino immigrant community to reach out to the Hispanic population in the country.
Comun’s aim is to make traditional banking services accessible to everyone through their online presence, like the immigrant workers toiling in the fields of California or the construction workers who live paycheck to paycheck, Santos said.
For the around 44 million Latinos in the U.S., who speak Spanish as a primary language, there are no incumbent banks that offer a complete banking experience in Spanish, according to Gutierrez, who is Comun’s chief technology officer.
Overcoming Hurdles
“If you don’t have a social security number, there’s a lot of hurdles to getting access to your bank account,” Gutierrez said. “And then, as a Hispanic, if you’re able to get past those two hurdles, then you’re very likely paying fees with the incumbents. So, minimum balance, overdraft — it’s just expensive to have a banking product.”
“With Comun, we wanted to solve those three hurdles. And that’s just the start. [For the long term] there’s a lot of other needs that we can meet,” Gutierrez added.
Latinos are three times more likely to be unbanked and two times more likely to fall for predatory banking services, the company said in a press release.
A 2022 study by the Center for Economic Research & Forecasting said that Latinos in the U.S. have a GDP of $2.8 trillion — the economic equivalent of the fifth largest economy in the world.
The digital banking app, which launched in September, crossed 1 million in payment volume a few weeks ago, Santos said.
The app is seeing a lot of growth in users and user engagement, with customers using the app for household expenditures like at grocery stores or gas stations, according to the founders.
Currently, Comun earns money through interchange fees but it plans to introduce new revenue streams in the future, the company said.
The app also gives access to educational content to help customers better manage their finances to get long-term financial growth.
The whole idea of Comun is anchored around family and providing services to help them manage their finances better, according to Santos.
“And it starts with remittances, which we’re implementing the first half of this year, but it goes beyond that,” Santos said. “It’s essentially helping the family members back home also have quality service.”
