Daylight, the LGBTQ+ neobank, is calling it quits

Daylight, an LGBTQ+ banking platform, is shutting down. It will cease operations on June 30, according to embattled co-founder and CEO Rob Curtis.

The announcement comes months after NY Magazine published an explosive article about the neobank. The article honed Daylight, whose seed and Series A fundraisers MinRegion had covered here And here, respectively. The NY Mag piece details a lawsuit filed by three former employees, as well as alleged fabrications and improper conduct on the part of Curtis.

In a blogging published today, Curtis said he felt “this is the right time to exit this market” and told customers that their “money is safe and will be fully accessible for transfer through June 30”.

He added: “Daylight had a great run and paved the way for US LGBTQ+ customers — we opened thousands of trans-inclusive debit accounts, supported thousands of future LGBTQ+ parents’ plans for their families. Ultimately, however, we were unable to provide these services in a way that covered our costs. This is probably a task for big banks and I hope they will take up the torch and carry on our legacy.”

Founded in 2020, Daylight has raised a total of $20 million in funding. Anthemis Group led its $15 million Series A in 2022. Other backers include Kapor Capital, Precursor Capital, Clocktower, Financial Venture Studio, and Citi.

Shortly after addressing the shocking allegations, the company contacted MinRegion with a statement from Curtis, which hit back at former employees. Essentially, Curtis said the company “regretted” that “some former employees were disappointed” that the company would “not go beyond the scope” of its mission and invest its “resources in addressing systemic, societal issues that impact LGBTQ+ people.” He added: “We are just as sad that we couldn’t meet their personal expectations of the start-up culture and continue to wish them well in the future.”

The former employees alleged age and wage discrimination, whistleblower retaliation and fraud. For example, Terrance Knox, who is black, claimed to have earned $85,000 less than his white colleagues. The lawsuit also alleges that Curtis “made up” a projection that Daylight would process $500 million in transactions by the end of 2023.

The CEO told MinRegion that the former employees’ claims were “fabricated,” adding, “We wholeheartedly disagree with their negative characterization of our company, and Daylight is fully prepared to address these concerns in court. .”

At the time of seed production, the company said its products were designed to promote financial equality and inclusion for the estimated more than 30 million Americans who identify as LGBTQ+. The startup also planned to build an LGBTQ+ business marketplace and a platform that offered discounts and rewards when members shop at merchants whose actions support the gay community.

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Daylight, the LGBTQ+ neobank, is shutting down by Mary Ann Azevedo, originally published on MinRegion

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