Bloom Money Secures $2M to Help Immigrants Save Money

Bloom Money has secured $2 million in early funding to revolutionize financial services for immigrant communities.

The fintech, backed by Zinal, Octopus Ventures, January Ventures, and Pact, raised this round through crowdfunding.

The UK-based startup will use the funds to digitize community saving circles and create accessible financial tools for underserved populations.

Bloom Money is Helping Immigrants Manage Their Money

Fintech veteran Nina Mohanty founded Bloom Money in February 2021. After working with banks like Starling Bank, Klarna, and Mastercard, she soon realized existing financial corporations don’t understand how immigrant communities manage their money. 

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“At a certain point, I just realized I got very frustrated wondering who was building for immigrant communities because I was building the same product for the same person all the time,” Mohanty told CNBC Make It.

She pointed out that immigrant communities focus much of their innovation on remittances, as many transfer money to families in their home countries. “I kept scratching my head and wondering, why is all the innovation about sending money away and not actually about pooling resources and building wealth here?”

Immigrants tend to save money differently. Rather than relying on mainstream options like high-interest savings accounts or taking loans from a bank, immigrants rely on community and collaboration.

“I would speak to bus drivers on their cigarette breaks or aunties that are cleaning offices and ask them how they were managing their money, and I kept coming across this thing where people were pooling funds together,” she explained.

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How Immigrants Move Money

This informal pooling system involves people who commit to saving money together. For example, three friends agree to each pay $100 a month into a savings pot, making a total of $300. 

The first month, one friend gets access to the full $300, which can be spent on a plane ticket home, new shoes for the kids, or even on investing in a business, among other things. The following month, the second friend gets to use the $300.

The rotation continues until each person has the opportunity to spend the $300. The group can agree to continue the cycle for as long as necessary.

“It’s academically called a roster or a rotating savings and credit association [ROSCA], but it’s very community-led. It’s very socially led,” Mohanty said, adding that several ethnic groups have a name for the practice. For example, it’s known as a chit fund by Indians, “pardner” by Jamaicans, “kameti” by Pakistanis, “ajo” or “esusu” by Nigerians, and “hagbad” by Somalis.

Bloom Money is Creating Generational Wealth for Immigrants

Alongside digitalizing the rotation of savings, Bloom hopes to build investment products as immigrants tend to focus on sending money home, which reduces the possibility of creating wealth for future generations.

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“They’re not necessarily planning for their future or their next generation, so imagine if our parents hadn’t saved or hadn’t put money into their pension pots or investment clubs, and so we want to make it so that people can build their wealth,” Mohanty said.

Bloom is currently building users’ credit profiles to lend money to them to help them invest in their pension pots or gold. Mohanty said the company hopes to “make it as easy as clicking a button to say ‘You’ve received your payout from your Bloom circle. Why don’t you invest it in your pension?”

Main Image: Nina Mohanty. Image Credit: Ninamohanty.com