Launching the first digital community bank for Black entrepreneurs
Kelly Ifill is blazing a trail in the financial services industry; by launching Guava, she becomes the first to open up a digital bank for Black entrepreneurs. It was a long-held dream brought to fruition by the global pandemic and facilitated by a partnership with banking as a service provider (BaaS) Treasury Prime.
“The pandemic put a magnifying glass on the experiences of Black entrepreneurs,” Ifill says. “It was the moment to act at a time when the country was more ready to have honest conversations and to solve these problems.”
Throughout the pandemic, she talked a lot with the proprietors of her favorite burger joint, wine shop, and other small business owners in her Brooklyn, NY neighborhood. Coming from a family of entrepreneurs, she understood their struggles and wanted to help.
“My grandmother ran a cleaning business, my dad has a contracting business, my aunt has a landscaping business and my cousin owns a bakery. I come from a family of small business owners. And so the experiences being discussed on the news hit very close to home.
Closing the racial wealth gap
Having witnessed firsthand how difficult it was for her family members to access capital, Ifill set out to create a new financial platform that would help close the racial funding gap.
“We're increasing access to financial capital by way of easier access to banking products, more equitable underwriting, including processes that are not using historically discriminatory practices.”
Ifill worked in education before attending business school at Columbia and pivoting to EdTech investing. She co-founded Seneca Network, a non-profit organization that supports Black and LatinX founders.
“The racial wealth gap makes it nearly impossible for Black founders to raise a ‘friends and family round’ and we were helping them fill a gap by making introductions to strategic partners, whether they were angel investors or industry experts.”
Quicker access through embedded banking
With Guava, a digital community bank, she is building upon that work. Working with Treasury Prime, Guava is able to provide a full lineup of banking products: customers can quickly open FDIC-insured bank accounts, get debit cards, and access full payment rails, including the ability to send and receive ACH and wire payments. This allows members to purchase inventory and materials, pay employees, receive payments from customers, and more.
“I realized I needed to create an easier path to a business bank account. About 80% of Black small business owners don't have business banking relationships and often operate businesses out of their personal checking account,” Ifill says. “Usually it works, but it creates a lot of muddy waters.”
Tapping into community
Guava also provides a critical resource for Black entrepreneurs: a community ecosystem to build social capital. With a click of a button, users can call on a network of entrepreneurs to share tips, knowledge, and best practices — forming a support system to help them make the smartest decisions and grow their businesses.
“It provides that safety net that many entrepreneurs do not have, ” Ifill says. “As a Guava member, you have people in your corner that will point out opportunities. And if you make a misstep, there's a network there, and a mesh of resources and services to support you.”
Partnering with a banking as a service provider
To navigate the challenges of the banking system and a complex regulatory landscape, Ifill decided to partner with a banking as a service (BaaS) provider, which builds the software APIs that connect fintechs and enterprise businesses to chartered banks.
“I was talking to a few other BaaS providers, and Treasury Prime was the one that made the most sense, because of their wide network of existing bank relationships.”
Treasury Prime matched Guava up with Piermont Bank and provided the complete API banking layer connecting its application directly onto Piermont Bank’s infrastructure.
“All the APIs that we need to connect to our partner bank are facilitated by Treasury Prime. All that was possible because of the strong relationship they had with Piermont.”
The team at Treasury Prime set Guava up with an FBO account, a single fiduciary account on the bank’s core. Within that larger account, Guava can issue multiple virtual accounts for every customer. These bank accounts support a full range of payment options.
“We work with Guava to facilitate quick access to banking products and a uniquely branded debit card,” says Stefan Hall, customer success manager at Treasury Prime. “They have been a fun and diligent team to partner with.”
Treasury Prime also provides support to help Guava troubleshoot and perform transaction monitoring.
“Whenever there are questions the team is responsive. And if they don't have an immediate answer, they definitely find resources for us to get to a solution,” Ifill says.
Guava has received seed funding from venture capital firms Backstage Capital and Precursor Ventures. It is launching a private beta and will gradually roll it out to the approximately 1,000 people who have signed up. The Guava team will be working towards a wider public launch where essentially anyone who wants to be part of the community of Black business owners can sign up and open an account in minutes. As a founder, Ifill says she’s feeling the pressure of trying to create something new from the ground up and all the expectations that carries, but is driven by her mission to help entrepreneurs.
“I care about these entrepreneurs. They are my family,” Ifill says. “I am motivated to create a more level playing field for people that I care about, and for communities that I cherish.”
To learn more about how Treasury Prime can help your bank or fintech grow through collaboration, get in touch with our team.