45 million Americans have no credit score. This immigrant founder has a solution
When Abbey Wemimo immigrated to Minneapolis at the age of 17 from Lagos, Nigeria, he and his mother struggled to get a loan without a credit score. Years later, this experience inspired Wemimo and his co-founder, Samir Goel, also a child of immigrants, to create Esusu, a fintech company that helps low to moderate income tenants form rotating savings clubs and use their rent payments to build credit. The company earns money through subscription fees on its savings platform and by charging landlords for using its rental declaration service. It also manages a rent relief fund. Esusu has raised more than $ 14 million, including a $ 10 million Series A round in July that included Serena Williams’ investment firm. Here, Wemimo talks about the lessons of his upbringing, the challenges fundraising as a black founder, and how the past year has made his company’s mission even more urgent. –As said to Sophie Downes
My journey started in the slums of Lagos, Nigeria. I lost my father at the age of two and was raised by my mother and two fiery sisters. I grew up realizing that I wasn’t going to have access to everything I needed in life. But my mother fundamentally believed in the importance of education, so she found the money for my tuition at one of the best high schools in the country. Being around the president’s grandchildren has helped me realize that where I come from shouldn’t limit where I go in life. So when everyone was taking international exams to go to the United States or Europe, I would do the same. One of my sisters was already in Minneapolis, so I applied and entered the University of Minnesota Crookston.
My mother and I immigrated when I was 17. We tried to borrow money for my tuition from one of the biggest financial institutions in Minneapolis and we were turned down so we had to borrow money at an interest rate over 400 % because we don’t have no credit score. My mom pawned my dad’s ring and a bunch of other jewelry, and that’s how we started in America.
The real impetus for starting Esusu was this transition phase and the experience of being marginalized by the financial system.
My co-founder, Samir Goel, and I met at the Clinton Global Initiative. He ran a food mobility company; I had founded a business providing affordable access to water and sanitation in developing countries. We went to American companies – him on LinkedIn, me on Goldman Sachs and then PwC – and kept in touch. One day we met at Max Brenner’s in Union Square and said, “There is more to life than continuing to work in a corporate tower. We wondered what we could do, leveraging our skills and our passion, to make the world a more perfect place. We made a commitment to each other to quit someday, but we stayed two or three more years to save and invest in this business. At the end of 2018, we had a minimum viable product. I remember telling my mom that I was quitting my job at the company, and her response was, “I thought we were successful.
There are 45 million Americans who don’t have a credit score – people like me and my mom, who couldn’t even access finance to begin with. What we got was an infinitesimal amount – $ 4,000 or $ 5,000, at an exorbitant interest rate. The average debt of people with a credit score is $ 92,000. If you multiply that by $ 45 million, that’s over $ 4.1 trillion. If those 45 million people who would otherwise go to payday lenders could get the average debt, we could unlock a lot of opportunities for people. What if they could get a mortgage and a car note, have a good credit history, and leverage it to get more stuff? It wouldn’t just be good for them, it would be good for the US economy because they would be paying property taxes. We can unlock more if we open access to more people.
To have a black person and a brunette trying to unlock over $ 4.1 trillion in capital is quite unheard of. There are many ways that the color of our skin and the way we look could have hampered what we’re trying to accomplish as founders – things like raising capital. I wouldn’t say anything was really obvious, but there were a lot of biased assumptions – about competence, about decision making, about the business itself. Investors blatantly said they did not trust the team to execute the vision. These things hurt your spine.
We spoke to over 300 investors to get our first round of funding, and the company almost went bankrupt because of the time it took. But there is still a silver lining, as we’ve found that some people who don’t necessarily look like us are always willing to bet on us and invest. It’s one in 100 people we talk to, but things keep getting better.
The past 15 months have been incredibly difficult, especially when it comes to racial reckoning in this country. At Esusu, we have been very direct. Our vision is to harness the power of data to close the racial wealth gap. For us, the past year has been an opportunity to set expectations with the members of our team and to remind them: this is what we stand for, this is what is happening in our company, and in the exercising your functions is the challenge we have before us.
There are many things that keep me hopeful during this dark time. Number 1 is my mom, who sacrificed everything to make sure I had a chance to fight. And the stories of people, like a gentleman I’ll never forget, who contacted us after being fired and was on the verge of eviction. We helped him with three months’ rent and I was the first person he called when he found a new job. It’s just special. I called my co-founder, and it was an emotional moment. I am also encouraged by the trends we are seeing. There’s still a lot of work to be done, and a lot of prejudice, but I think the good always outweigh the bad few – and that’s what this country really stands for.