Bloom Money Secures £1M Funding to Empower Ethnic Communities with Digitized Microcredit Finance

Bloom Money, a fintech company based in the U.K., has successfully raised £1 million in funding to digitize the traditional rotating savings and credit association (ROSCA) used by ethnic communities worldwide.

The ROSCA system involves informal gatherings within specific communities, functioning as a form of a banking system where members collectively pool and save money, accessible to individuals on a rotating basis. Known by various names globally, such as "hagbad" in Somalia and "pardna" in parts of the Caribbean, this system aims to circumvent conventional banking channels, which have often been accused of discrimination against minority communities in the U.K. According to CEO Nina Mohanty, some instances even involve blatant racism, though the discriminatory practices may not be as evident as red-lining in the United States.

Bloom Money's objective is to digitize and streamline the ROSCA process, allowing people to carry out financial transactions within their trusted circles based on shared attributes like race, nationality, and even down to the tribe level. Nina Mohanty, whose parents were immigrants to the U.S., was motivated to address this issue when she moved to the U.K. and experienced firsthand the challenges faced by immigrants in establishing their financial footing. Recognizing the growing migration across Europe, Mohanty saw both an economic justice imperative and a significant opportunity to address this underserved market.

Co-founder and CTO Dan James shares this conviction due to his personal experience growing up in an ethnic community in central Birmingham, witnessing the positive impact of ROSCAs on historically underserved individuals entering the U.K.

With the pre-seed funding, Bloom Money will further develop its digital savings features, ensuring that all funds are secured by an electronic money institution. Zinal Growth led the fundraising round, with participation from January Ventures, Pact VC, and angel investors Berenice Magistretti and June Angelides.

Bloom Money's platform allows users to create groups known as "Bloom Circles," facilitating the sharing and saving of money. Additionally, the platform offers educational resources on various aspects of life in the U.K., such as obtaining a driver's license, setting up trust funds, and understanding credit scores.

Despite the success of the fundraising, the journey was not without its challenges. Mohanty highlighted the difficulty in explaining to investors that Bloom Money aimed to serve extremely underserved communities. They encountered misunderstandings and faced prejudice during the regulation process. Nevertheless, the company managed to maintain a cap table with significant ethnic and gender diversity. About 70% of their cap table identifies as women, nearly 50% hails from minority ethnic backgrounds, and approximately half identify as first or second-generation immigrants.

Angel investor June Angelides, who grew up in Nigeria, understood the importance of Bloom Money's mission, having witnessed firsthand the reliance on community-based saving methods like Ajo (the Nigerian version of ROSCA) due to lack of trust in traditional financial systems. Angelides believes that Bloom Money offers a solution to the challenges faced by migrant communities, allowing them to strengthen ties with the U.K., build wealth, and access financial products that were previously difficult to obtain.

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