Bloom Money secures £1M funding to advance digital financial services for ethnic communities
Bloom Money, a fintech company based in the United Kingdom, has raised £1 million to digitize the informal financial management system used by ethnic communities worldwide. This system, known as the “rotating savings and credit association” (ROSCA), is a model that varies in detail but typically involves a group of people from a particular community who act as a bank, collecting and saving money that members can withdraw. The aim is to avoid conventional banking systems that often discriminate against minority communities, especially in the UK. Bloom Money wants to digitize the ROSCA process to allow people to conduct financial transactions with those they trust, whether based on race, nationality, or tribe.
CEO Nina Mohanty, a daughter of two immigrants to the United States, was inspired to work on this issue after moving to the UK and experiencing firsthand how difficult it can be for immigrants to set themselves up financially. Mohanty believes there is not only an economic justice point to this problem but also a huge opportunity, as migration is growing across Europe. Her co-founder and CTO, Dan James, supports the ROSCA system because he has seen how effective it can be, having grown up in an ethnic community in central Birmingham.
Bloom Money has created ‘Bloom circles’, allowing people to share and save money. It also provides educational resources on the basics of life in the UK, such as how to get a driver’s license, set up a trust fund, and understand credit scores. The company plans to use the funds from the pre-seed round to continue building its digital savings features, with all funds safeguarded by an electronic money institution.
The fundraising was led by Zinal Growth and included participation from January Ventures, Pact VC, and angel investors Bérénice Magistretti, and June Angelides M.B.E. Mohanty described the fundraising process as “really interesting,” with the most challenging part being explaining to investors that the company intended to target underserved communities. She reported that there was much misunderstanding and even prejudice that they had to overcome.
Despite these challenges, Bloom Money’s cap table is diverse, with nearly 70% identifying as women, almost 50% from a minority ethnic background, and about half identifying as first or second-generation immigrants. Angel investor June Angelides, who grew up in Nigeria, believes Bloom Money is trying to solve a big problem. According to her, communities have struggled with trust in financial systems for generations and have preferred to use community-based saving methods.
Bloom Money aims to allow these communities to build stronger ties with the UK, grow their wealth, and access additional financial products that would otherwise be out of reach. With Bloom’s digital platform, migrant communities can now send money back home while also building their wealth and accessing financial products that were previously unavailable to them.