Charlie, a neobank for the 62-plus demographic, will soon launch fraud protection products after closing a $23 million Series A round, the fintech announced on Tuesday.
After garnering investment from TTV Capital, FPV, Better Tomorrow Ventures and other seed investors, the latest round of funding will help the firm launch products that address the more than $28 billion stolen from older Americans every year, the company said in a statement.
“Charlie is on a mission to fundamentally transform financial services for the 62+ community and with this new funding, we are able to take great strides in doing just that,” Kevin Nazemi, co-founder and CEO of Charlie, said in a statement. “Everything we do at Charlie is designed to meaningfully address the unique challenges retirees and soon-to-be-retirees face financially and help them make the most of their limited resources to enjoy life.”
The fresh capital, a combination of $16 million in equity and $7 million in debt, comes less than six months after the firm’s public launch in May, when it rolled out its retiree-focused banking services after securing an initial $7.5 million in funding.
The company will soon launch a set of anti-fraud tools designed specifically for the 62+ population, “using their habits, patterns, and preferences,” the fintech said in a release. The funding will also go toward hiring and training new talent, as well as additional product development.
Charlie declined to share how many customers it has acquired since its launch earlier this year, but a spokesperson said it has users in all 50 states.
The fintech, whose banking services are provided by Attica, Ohio-based Sutton Bank, has several features aimed at solving pain points facing retirees and soon-to-be-retirees.
“Most financial services offerings aren’t built for them, unless they have a ton of money,” Nazemi told Banking Dive in May. “The industry could do a lot better.”
Charlie account holders receive a 3% annual percentage yield on average balances, and have access to a network of 55,000 ATMs, including retailers CVS and Walgreens, the company said.
The fintech launched with a feature that allowed account holders who linked their Social Security direct deposit to their Charlie deposit account to withdraw the funds up to four weeks early. The startup, however, had to limit the number of users who can access the benefit, due to demand, a company spokesperson told Banking Dive.
“Charlie’s up-to-four-weeks-early Social Security benefit requires a tremendous amount of capital, and given the incredible demand from customers since our launch in May, we’ve reached capacity at this time,” the spokesperson said.
All Charlie customers who signed up before Sept. 1 continue with the up-to-four-weeks-early benefit. Customers who signed up after Sept. 1, can withdraw their Social Security benefit three-to-five days early, the spokesperson said.
“Charlie has generated impressive customer traction just six months post-launch, and that's a testament to what the team has created,” Gardiner Garrard, co-founder and managing partner of TTV Capital, said in a statement. “We're energized by their vision and are proud to invest in their future.”
The company’s capital raise comes as high interest rates and inflation are contributing to a difficult funding environment for fintech startups. Fintech venture capital funding has dropped globally by 49% year over year to $23 billion in the first half of 2023, according to S&P Global Market Intelligence.