Comun, a neobank founded by Latinos for the Latino community, closed a $4.5 million seed funding, the company announced Tuesday.
The funding led by Costanoa Ventures, along with South Park Commons and FJ Labs, aims to build a Spanish-first digital banking experience for the Latino community in U.S.
“We built Comun to make it easier to thrive as an immigrant family in the U.S.,” said Andres Santos, co-founder and CEO of Comun. “Banking is a gateway to accessing many services that are vital to a person’s livelihood. My co-founder and I both experienced how challenging it can be to navigate the banking system as immigrants. Our goal is to empower families to be successful in both their finances and in the U.S. with a financial partner that they can trust and understand.”
The challenger bank provides basic traditional banking services without requiring applicants to give a Social Security number — they can use their taxpayer identification number, a foreign passport or another form of a foreign identification document to sign up.
Founded by Abiel Gutierrez and Santos, who came to the U.S. from Mexico to pursue higher education, Comun offers essential financial services to the Latino community at no extra fees, according to the company’s website.
The underlying banking services offered by Comun are provided by Piermont Bank.
Comparatively new in the market, Comun is working with nonprofits, business-to-business companies and consulates that support or serve the Latino immigrant community to reach out to the U.S. Hispanic population.
Comun’s aim is to make traditional banking services accessible through an online presence, Santos said.
For Latinos in the U.S. who speak Spanish as a primary language, there are no incumbent banks that offer a complete banking experience in Spanish, said Gutierrez, who is Comun’s chief technology officer.
"If you don't have a Social Security number, there's a lot of hurdles to getting access to your bank account," Gutierrez said. "And then, as a Hispanic, if you're able to get past those two hurdles, then you're very likely paying fees with the incumbents. So, minimum balance, overdraft — it's just expensive to have a banking product.
"With Comun, we wanted to solve those three hurdles. And that's just the start. [For the long term], there's a lot of other needs that we can meet," Gutierrez said.
Latinos are three times more likely to be unbanked and twice as likely to fall for predatory banking services, the company said in a press release.
Latinos in the U.S. have a gross domestic product of $2.8 trillion — the economic equivalent of the fifth-largest economy in the world, according to a 2022 study by the Center for Economic Research & Forecasting.
The Comun app, which launched in September, crossed $1 million in payment volume a few weeks ago, Santos said.
The app is seeing growth in users and engagement, with customers using the app for everyday expenditures such as groceries and gas, the founders said.
Comun earns money through interchange fees, but it plans to introduce new revenue streams at some point, the company said.
The app also provides educational content for customers to better manage their finances and achieve long-term financial growth.
The idea of Comun is anchored around family, Santos said.
“It starts with remittances, which we’re implementing the first half of this year, but it goes beyond that,” Santos said. “It’s essentially helping the family members back home also have quality service.”