Tech

The cofounder of a digital bank geared toward Black and Latinx users details the fintech’s $40 million Series A and how it’s grown a waitlist 550,000 strong

  • Greenwood is a banking app designed for Black and Latinx communities.
  • In late March, the startup announced a $40 million Series A round led by Truist Ventures.
  • Founder Ryan Glover and Truist Ventures head Vanessa Vreeland detail how the deal came together.
  • See more stories on Insider’s business page.

Ryan Glover was just two weeks removed from announcing the launch of his startup when he got an unsolicited call most entrepreneurs can only dream of.  

“We’ve never moved this fast on our investment,” Glover heard on the other end of the line, “but we are all in on helping you guys.”

Glover, along with partners Mike “Killer Mike” Render and Andrew Young, had just unveiled plans in October for Greenwood, an upstart banking app focused on serving Black and Latinx communities.

The call was from Atlanta-based Truist Ventures, the recently launched venture-capital arm of Truist Bank, the new firm that was a result of the 2019 tie-up between regional banking giants SunTrust and BB&T. 

Just a few months later, on March 25, Greenwood announced a $40 million, Series A round led by Truist Ventures with participation from six of the nation’s seven largest banks, in addition to Mastercard and Visa, all of which were new investors. 

“It feels like all the stars are aligned. You couldn’t have scripted it any better,” Glover told Insider.

“We couldn’t believe, when we talked to them two weeks after they announced, that they already had over a 100,000 folks on the waitlist,” Vanessa Vreeland, the head of Truist Ventures, told Insider.

That number has since grown to 550,000, according to Glover — all in anticipation of Greenwood’s first slate of banking features set to go live this summer.

Glover and Vreeland spoke to Insider about how the deal came together and plans for the banking app. 

Origins of Greenwood

Greenwood, also headquartered in Atlanta, is named for the thriving Black community in Tulsa, Oklahoma, that used to be known as “Black Wall Street” before it was destroyed by a white mob during the 1921 Tulsa Race Massacre.

Greenwood, Glover said, reimagines the promise of its namesake. He said the startup will look to promote the circulation of capital within Black communities, provide banking capital to deserving borrowers who have often been frozen out of mainstream lending, and offer nonpredatory loan options to customers.

“I want to put every check-cashing facility in the country out of business,” Glover said. 

Greenwood aims to reach two broad sets of customers: those who haven’t traditionally accessed mainstream banking and lending institutions (one 2020 Federal Reserve survey found that 32% of Black Americans are underbanked), and wealthier Black and Latinx customers who have banking options but might be dissatisfied with the extent to which they’ve been able to receive loans.  

“Absolutely our products, we believe, will certainly be attractive to the unbanked community, but the research that we’ve done indicates our community members are ones with banking options,” Glover said.

But middle- and upper-class segments in Black and Latinx communities are also part of Greenwood’s target market, he added.

“I’ve built multiple businesses across many industries and have not personally had access to banking capital, like other entrepreneurs from other cultures,” Glover said.

Originally from the San Francisco Bay Area, Glover moved to Atlanta after graduating from Howard University. He started the music label Noontime Records and cofounded Bounce TV, a nationwide broadcast network geared toward the Black community, in 2011.

He said Greenwood will first look to offer debit, spending, and savings features this summer alongside peer-to-peer money transfers and early access to paychecks, followed later this year by lending and credit options, and investment tools to come next year.

While Greenwood has yet to announce the bank it will partner with for its banking offerings, Vreeland said it will be teaming with minority depository institutions to offer lending to its customers.

“The loan volume will be originated and supported by the MDIs initially. That we’re really excited about, because we think MDIs need a different loan origination channel,” Vreeland said.

Greenwood and Truist both have Atlanta connections

For Greenwood’s Series A, Truist Ventures first sent a term sheet to the startup before the holidays, while the diligence process began in early January and involved what Vreeland described as a “two-way dialogue” between the companies.

And while Truist and Greenwood were ready to close a month after that, the addition of new investors meant the deal wasn’t finalized until March.

Glover said Greenwood’s investment interest to date has come from a combination of inbound and outbound outreaches and that building out a brand and presence on social media since the launch have particularly helped bring new backers into the fundraising round.

“Content creation has always played an integral role in how we communicate with our community,” Glover said. “It’s a major part of our DNA and helps us define our brand. Social really helped us onboard, if you will, many of the other banks in our mosaic of Series A investors.”

Vreeland said a key in the partnership between Truist and Greenwood, meanwhile, was the fact that both companies are headquartered in Atlanta.

“We really positioned ourselves as their hometown bank, how important it would be for the hometown bank to lead the investment round,” Vreeland said. “And there were certainly a lot of familiarity with our executives and their executives.”

Greenwood’s ties to Atlanta also run deep among Glover, the civil-rights icon Young, and the rapper Killer Mike.

Glover knows Young, an Atlanta native and former mayor of the city who also served as the US Ambassador to the UN under former President Jimmy Carter, from their time together at Bounce TV. Glover was the president of Bounce, and Young, who Glover said he calls “Uncle Andy,” also cofounded the network and served on its board.

“He’s always been a father figure to me,” Glover said.

Glover’s relationship with Killer Mike, meanwhile, goes back more than 20 years, to Glover’s days in the music industry in Atlanta.

“He’s been a vocal spokesman of racial equality and financial empowerment for over a decade, as long as I’ve known,” Glover said. 

‘It’s time for it to start changing’

Vreeland, who was previously a senior vice president in commercial banking at SunTrust and also led acquisitions and strategic investments at Fifth Third Bank, said the Greenwood investment also represented a venture-capital  opportunity to direct more funds toward startups founded and led by people of color and women.

A 2019 survey released by Diversity VC and RateMyInvestor, for example, found that only 1% of venture capital goes to startups with Black founders, and 2% goes to startups with Latinx founders. 

“It’s really not lost on me because I grew up professionally, if you will, in the VC and private-equity community, that less than 5% of VC funding goes to entrepreneurs of color or female entrepreneurs. And that hasn’t changed in the last 10 years, and it’s time for it to start changing,” Vreeland said. 

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