Comun, a digital bank focused on serving immigrants in the United States, has raised $21.5 million in a Series A funding round less than nine months after announcing a $4.5 million capital raise, TechCrunch first reported.

This is a crowded space filled with a number of startups, including Tanda, Bloom Money, Majority, Welcome Tech, Maza, and Pillar, so the fact that Comun was able to raise capital in consecutive rounds in such a short period of time is remarkable. PitchBook estimated its previous valuation after the last capital raise at $62 million. CEO and co-founder Andres Santos said PitchBook’s valuation was “inaccurate” and that the company’s current valuation was “up more than 50%.”

The traction of the New York-based startup was what prompted investors to double down. According to Santos, Comun increased its monthly revenue by “50x” in the first six months of 2024. While this growth means initial revenue was low, it shows a rapid adoption rate. He also said that since the beginning of the year, the company has gained users after launching new products and increased revenue per user by four times.

Santos and his co-founder Abiel Gutierrez founded Comun in late 2021 after facing financial exclusion when they immigrated to the United States from Mexico. Their goal was to offer Latin American immigrants digital banking services, including instant payments and cash withdrawals at numerous locations, check deposits, and early paychecks.

For example, they provide native Spanish speakers seven days a week and allow customers to apply for an account with 100 types of identification from Latin America, including foreign passports. Most traditional banks require their customers to provide a U.S. Social Security card or proof of address, such as a mortgage or utility bill.

“The Latino community is underserved,” Santos told TechCrunch, adding that his research showed that many of these immigrants simply chose not to use a bank. As such, his startup’s application process is designed to “eliminate many of the frictions that immigrants typically face while blocking fraudulent actors.”

They, too, are increasingly adopting Comun as their primary banking account, he said, and the account is growing particularly in California, Florida, Georgia, New York and Texas.

In March, the company launched a new remittance product that Santos said has been very popular. Customers send an average of 3.1 remittances per month. Today, Comun is on track to process over $1 billion in annual payments, he said.

The startup launched its first product in October 2022, using banking-as-a-service (BaaS) middleware. But the co-founders decided it made more sense to own their own infrastructure and decided to build it out. In November 2023, Comun launched a new program with Community Federal Savings Bank as a partner.

“We have expanded very quickly since then,” Santos said.

This decision may have been a wise one considering that some fintech companies that relied on one of the better-known BaaS providers, Synapse, faced closure or problems accessing customer deposits following Synapse’s collapse.

Comun does not charge any fees for opening an account and has no minimum balance, monthly or membership fees. The company makes its money from interchange fees and transfer fees, as well as interest on deposits and fees for facilitating instant transactions. However, the company is working to reduce its dependence on interchange fees.

“We started the year with the majority of our revenue coming from interchange, similar to Chime and other neobanks,” Santos said. “Today, interchange revenue is less than 50% of our revenue, and we are seeing significant growth in other revenue streams, such as remittances.”

Comun currently employs 20 people and a team of around 50 customer service representatives.

Redpoint Ventures led the startup’s Series A funding round, which also included participation from ANIMO Ventures, Costanoa Ventures, FJ Labs, RTP Global and South Park Commons.

Meera Clark, a director at Redpoint Ventures (which has also backed companies such as Stripe and Nubank), said Comun’s metrics and “organic demand” were “among the best” her firm had seen in the fintech space “in years.”

“More than half of the team’s technical staff comes from companies like Brex and Nubank. We are confident that Comun’s technical rigor from the start will only increase as the team grows,” she said.

The company plans to use the new capital to expand locations and develop new products. For example, Comun recently hired former employees from Nubank and Capital One to help build a loan product, Santos said.

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