CapWay Founder & CEO Sheena Allen joins Yahoo Finance to discuss how CapWay adapted during the pandemic to help customers become financially healthy to build generational wealth and how the company continues to influence banking.
SIBILE MARCELLUS: Welcome back to “A Time for Change.” August is National Black Business Month, and there’s been a big push recently to support Black-owned businesses. Black Americans account for 14% of the US population, yet own just 2.2% of businesses.
ALEXIS CHRISTOFOROUS: And CapWay is one of those businesses. It’s a fintech company founded by our next guest. And its mission is to educate and serve those long overlooked by traditional banks. CapWay founder, Sheena Allen, joins us now. And Sheena, it’s great to have you here on the show. I know that CapWay was started about five years ago. It started out as a debit card option for the unbanked. Tell us how the company and its mission has evolved since then.
SHEENA ALLEN: Yeah, so the company I thought of the idea in 2016. Idea came from just going to bigger cities and seeing how they only accepted debit card and credit cards. Then when I would go back home to Mississippi, which is where I’m from, people only carry cash. So we did two years of research, which got us to late 2019, late 2018, early 2019, where of course, we started building. And kind of going to the neo banking space. But the pandemic hit, of course, and we saw all the need of course, expand outside of just, I need access to a bank account.
And so as a company, we saw, hey, this is where we begin to not just offering debit cards, how do we offer education? How do we get into payments? How do we offer things so that people, if they are being pretty much pushed into a cashless economy, what they need to be financially healthy? How do we put them on a, not on a sprint, on a marathon to build generational wealth? And so I say we’re from, how do we be a neo bank or offer debit cards to how do we build a financial system for the next generation for people who have historically been overlooked by the traditional banking system.
SIBILE MARCELLUS: Sheena, CapWay operates as a neo bank. So with no traditional physical branches, no banking license, no charter, how do you attract new customers? And how do you convince them to trust you with their money?
SHEENA ALLEN: Now the biggest thing for us at CapWay, which is I would say, not only our biggest competitive advantage, but also honestly has been I think what people love about us, is we are probably totally opposite from what you will see even from a neo bank or the digital banking space, which is very still new. Me, as a founder, I’m not usually what you see when you walk into like a fintech conference or when you see like a quote unquote, bank owner or a neo bank owner.
Our education, the way to present ourselves, the information that we’re giving, we use things that are way more relatable, things that are more modern. We don’t come off as, as we say at CapWay, like your grandmother’s bank account, the way that money was done a long time ago. Times are changing. The way they look are changing Gen Z is a totally different breed.
Millennials, where we are now even financially, we’re just a whole different space. So I think the thing that makes people trust, the thing that makes people like us, why people even want to be give us a try, even though there’s multiple options, is we offer something different not only just from a platform perspective, but from the building, from the perspective from the culture. We’re just very different.
ALEXIS CHRISTOFOROUS: Sheena, I want to talk for a minute about your personal journey. What was it like for you as a Black female entrepreneur? We talk a lot on the show about how just a fraction of the VC funding goes to women-led businesses, let alone women of color. So how were you able to find the seed money for this company? And if you can share with us who some of your investors are.
SHEENA ALLEN: Yeah. Very early, this is my second company, so a lot of my early funding, which people call family and friends round, but for me, I call it my angel and friends round, came from people that I met in my previous company who invested early. So like Arlan Hamilton, Backstage Capital, for example. But then going into, as we scaled, as we grew, of course, we end up finding people who, for one, believed in what we were doing.
Two, it wasn’t just saying it for PR, they really want to invest and help women of color, people of color. And so some of those investors that we have now, they range from Initialized Capital, SoftBank. SoftBank Opportunity Fund is one of our investors who has been a huge, huge help for us. I mean, they’re one of those investors who, they’re not like micromanaging, but they’re calling, what do you need, how can we help. So we have been lucky to have investors like SoftBank who once again, it’s not just lip service, it’s not for PR. They really have invested not just their money, but their time and their resources.
SIBILE MARCELLUS: Sheena, you said that you’ve seen friends and family members become victims of predatory practices. Can you give us a sense of what happened?
SHEENA ALLEN: So I grew up in a small town, Terry, Mississippi. And Terry is a place that only had one bank, and it was a local bank that not too many people used. Mississippi actually has the highest population per capita of unbanked and under-banked residents. And that was no different for the people in my community. It was no different for my family and friends. I did have the great grandmother who kept her money at her home. I had the sisters, the uncles, who were unbanked. I have driven my grandmother to a check cashing place, to a title loan place.
So it wasn’t something for me that when I speak about this field, it wasn’t that I started CapWay because I saw an opportunity like, oh, this is a way to make some money. It was also personal. This was once again, this was me taking my grandmother to a check cashing place. This was seeing family members, friends who were unbanked and having to rely on predatory services to keep their lights on.
ALEXIS CHRISTOFOROUS: Sheena Allen, we’re going to have to leave it there, but thanks for joining us today and telling us about your company, CapWay.