Minority Focused Startup Gains Seed Funding to Address Racial Wealth Gap

While COVID-19 revealed the racial “health” gap in our country, the racial “wealth” gap poses a similar significant challenge, according to Yemi Rose. Rose is not a doctor seeking to fight the impact of COVID-19, but he is a seasoned financial executive whose career has led him to fight for minorities in overcoming the racial wealth inequity that exists in the United States today.

Rose has taken an innovative approach in his fintech startup “OfColor” by leveraging the workplace to help minorities improve their financial health. Having just received seed funding from PSGFunds, Rose is further on his way in tackling this challenge.??

“The fact that America is such a wealthy country and tolerates the current racial wealth gap is disheartening. But while the current state is dire, we believe it is fixable. I view the workplace as an ideal distribution center for these solutions, and the good news is that there’s a solid contingent of visionary corporate leaders who are dedicated to enabling their employees of color to build financial legacies,” said Rose, both Founder and CEO of OfColor.

OfColor works with employees of color to help them earn and keep more of their income. The fintech startup founded in 2019 seeks to accomplish this by integrating the best from fintech and behavioral finance into one user friendly platform.?That combination in the workplace will help employees who are members of minority groups reach their goals to achieve better financial health.

“We see employers as powerful distribution partners for our products, and we aim to enable companies of all sizes to provide their employees with access to premier fintech tools and services—that are specifically designed for us, by us,” states Rose who is a person of color.?He is fighting to help all minorities.?

Rose sees partnering with companies as a win-win in narrowing the wealth gap.

“We believe our model lets employers save on benefits, improve retention and compel recruitment. Together, we close the gap.”

Rose gained PSG’s support through both his visionary business plan and his extensive career in finance, having spent nearly two-decades in corporate positions focused on financial wellness at the intersection of financial services, communications and marketing. Rose most recently served as Vice President of Financial Wellness Enterprise Initiatives with Prudential Financials’ Global Communications Group before launching his startup OfColor.

As a black owned business Rose himself overcame a major hurdle upon receiving financial assistance for his startup. Minority startup funding is very hard to come by---as less than 3% of venture capital funding goes to people of color. Following the racial unrest in 2020 new sources of funding are emerging.?

Large corporations and their venture arms or foundations and some financial institutions well are setting up funds specifically to help women and minorities gain?access to capital?for their startups and early stage companies.?In venture capital funds are being launched that target women and minority entrepreneurs such as?Chloe Capital?and?Aperture Venture Capital.

Government agencies such as the?Minority Business Development Agency?(MBDA) and the?SBA?are sources of funding for underrepresented groups.?The former oversees Federal grant programs assisting minorities in their startups and small businesses. The latter provides small business loans and technical assistance as a part of a program designed to assist minorities when traditional lenders such as banks do not.

“Yemi and the OfColor team are addressing a paramount issue and we’re honored to have the opportunity to support the important work they’re doing to help progress toward equitable financial wellness,” said?Mark Hastings, Co-Founder and CEO of private equity firm?PSG. “We’re energized by the significant opportunities for OfColor to grow and make a meaningful impact, underscored by an increasing number of organizations committing to advance diversity, equity and inclusion.”

Having now received funding, the company’s focus is on expanding its platform and go-to-market strategy.?Its target customer base is Fortune 500 and upper-middle market companies. OfColor has gained the early support of MetLife as part of their efforts to improve the financial health of all employees nationally.

Rose was motivated to launch OfColor having come to the realization that “despite race being a significant predictor of wealth in America, the minority money experience seemed to be an afterthought”. His workplace approach distinguishes?OfColor?from current financial wellness solutions.?

The New Jersey based company is specifically focusing on African-Americans, Latinx, and AAPI employees who will receive wealth-building solutions that includes budgeting, savings, and automated debt reduction.?They also will receive access to culturally competent in-person and AI-driven advice.

“In our view through our unique understanding of behavioral finance, our relevant offerings may work to build wealth and secure critical financial legacies,” Rose states. “We’re thrilled to have the support of PSG and their network of experienced entrepreneurs at our side as we work to move the corporate conversation away from of-the-moment equality — to one about equity, where we recognize the role of race in American wealth creation.”

Rose achieved a major feat by gaining funding as a minority founded startup. He plans to transfer that success to minorities in the workplace by putting them and their families on a path to financial health and long term prosperity.

Read about?Teen-Focused FinTech Startup Step Raises $100M Series C, Big Name Celebrity Investors Join Round