Rapidly Expanding Neobank Comun, Targeting Immigrants, Raises $21.5 Million in Fresh Funds Shortly After Previous Round

Comun, a fintech venture dedicated to immigrants in the US, has successfully secured $21.5 million in Series A funding, coming on the heels of a $4.5 million funding event reported less than nine months earlier, according to an exclusive by TechCrunch.

With many startups vying for attention in this sector, such as Tanda, Bloom Money, Majority, Welcome Tech, Maza, and Pillar, Comun’s ability to secure funding consecutively in a brief span is noteworthy. Although Comun‘s last valuation was pegged at $62 million by PitchBook, CEO and co-founder Andres Santos contests this, stating the company’s value has surged by over 50% since.

The impressive traction gained by this New York-based startup, growing its monthly revenue 50-fold in the first half of 2024, intrigued investors, Santos reveals. This rapid uptake reflects both an increase in its user base and a fourfold rise in revenue per user, bolstered by the introduction of new offerings.

Having migrated from Mexico and encountered financial barriers in the US, Santos and his fellow co-founder Abiel Gutierrez inaugurated Comun in late 2021. Their mission was to facilitate digital banking for Latino immigrants, providing services like instant payments and withdrawals, checks deposits, and early paycheck access.

A key feature is their inclusion of native Spanish support and acceptance of over 100 ID types from Latin America for account applications, circumventing the typical banking requirement of a US Social Security card or proof of residency.

Santos highlighted the gap in banking services for the Latino community, with many opting out due to barriers. Comun aims to eliminate these barriers while preventing fraud, gaining traction as a primary banking choice, particularly in states like California, Florida, Georgia, New York, and Texas.

Santos mentions that a newly launched remittance product has found popularity among users, with an average of 3.1 remittances sent per month. He anticipates that Comun will surpass $1 billion in annual payment volume.

Initially launching its first product in October 2022 utilizing BaaS (banking-as-a-service) systems, the co-founders moved to develop their proprietary infrastructure. By November 2023, Comun had rolled out a new scheme with the Community Federal Savings Bank as its partner, accelerating their growth trajectory.

This strategic pivot seems prudent especially as some fintechs faced challenges with customer deposits after the collapse of a prominent BaaS provider, Synapse. Comun distinguishes itself by not imposing account opening, maintenance, or membership fees, instead generating income through interchange and remittance fees, interest on deposits, and fees for instant transactions, while actively seeking to diversify its revenue sources beyond interchange fees.

As of now, Comun boasts a workforce of 20 alongside a customer support team of 50 agents.

The Series A funding round, spearheaded by Redpoint Ventures and featuring contributions from ANIMO Ventures, Costanoa Ventures, FJ Labs, RTP Global, and South Park Commons, will fuel Comun’s growth and product development. Redpoint Ventures’ Meera Clark, who admires the robust metrics and organic demand exhibited by Comun, foresees further enhancements in their technical capabilities as they continue to expand their team.

With new talent onboard from Nubank and Capital One, Comun is set to introduce a credit product, further broadening its suite of offerings to meet the needs of its customer base.

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