Loading Now

Charlie’s senior-focused banking puts new funding toward stopping fraud

Charlie's senior-focused banking puts new funding toward stopping fraud

Charlie’s senior-focused banking puts new funding toward stopping fraud

Less than six months after launching to the public and announcing a $7.5 million seed raise, a startup providing banking services to Americans over the age of 62 has raised additional funding.

The days of closing two capital raises in a matter of months are mostly long gone, so it naturally caught our attention when Charlie reached out to share that it has secured $16 million in Series A funding and $7 in debt financing. TTV Capital led the latest round, which also included participation from FPV Ventures and existing backer Better Tomorrow Ventures, among others.

Kevin Nazemi, co-founder and CEO of Charlie, founded Charlie in late 2021 with the mission of “transforming” financial services for the 62+ community. 

Since its launch in May, Charlie has acquired several thousand customers in all 50 states, Nazemi said.

“Whenever you launch a new company, it’s nerve-wracking,” he told TechCrunch. “There was a collective sigh of relief when we saw so many customers signing up and we knew our approach…was resonating.”

Features include faster access to their Social Security checks, 3% earnings on balances and no monthly fees or minimums. The company says users will one day also be able to get “frictionless, embarrassment free discounts” just by using their debit cards, according to Nazemi, so they don’t have to do things like show an AARP card or their ID to prove they are seniors. Like many fintechs, Charlie is not a bank — its banking partner is Sutton Bank, which insures all deposits up to $250,000.

“Over 50% of the 73 million seniors in the United States do not feel prepared financially for retirement, and for too long, their unique financial needs have been neglected,” he said. “Charlie is designed to meaningfully address the many challenges this community faces, such as rampant financial fraud, shifting from accumulating assets to deaccumulation and a lack of transparency, control, and trust with most financial services products they encounter.”

One of the things Charlie is designed to address is the fact that until a person retires, they are accumulating assets. But once they retire, they go into “de-accumulation mode.” That can be scary and challenging. To help older adults adjust, Charlie says all customers who signed up after September 1 can withdraw their Social Security benefit 3-5 days early (those who signed up before can withdraw it 4 weeks early).

The company makes money through interchange fees; when a customer spends money with their Charlie Visa Debit card, Visa pays Charlie a percentage of what they earn from the merchant. 

This is our primary source of revenue and enables us to provide customers with no monthly fees and free access to over 55,000 ATMs,” Nazemi said. “Other third parties involved in transactions may charge fees outside of Charlie’s control, which will likely be disclosed at the time of the transaction.”

Charlie plans to use the new capital toward rolling out a suite of personalized fraud protections designed specifically for its target customers, adding to its 15-person team and developing new products and features.

Gardiner Garrard, co-founder and managing partner of TTV Capital, told TechCrunch via email that the COVID-pandemic led to more people — including those aged 62 and older — becoming more comfortable with digital banking. This, he said, created “a massive opportunity for financial institutions to more directly engage with this demographic.”

“But until recently, the products and services that retirees needed were often difficult to find online, and the user experience was not intuitive,” Garrard said. “The early feedback that Charlie has received is very encouraging, and their offerings are meeting an acute market need.”

Want more fintech news in your inbox? Sign up for The Interchange here.

Source link