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CapWay Founder and CEO Sheena Allen joins Yahoo Finance to discuss how CapWay has adapted during the pandemic to help clients become financially healthy to build generational wealth and how the company continues to influence the banking sector.
Video transcript
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Marcellus whistle; Welcome to “A Time for Change”. August is National Black Business Month, and there has recently been a big push to support black-owned businesses. Black Americans make up 14% of the American population, but own only 2.2% of businesses.
ALEXIS CHRISTOFOROUS: And CapWay is one of those companies. It’s a fintech company founded by our next guest. And its mission is to educate and serve those long neglected by traditional banks. CapWay founder Sheena Allen is joining us now. And Sheena, it’s great to have you here on the show. I know CapWay was launched about five years ago. It started out as a debit card option for the unbanked. Tell us how the company and its mission have evolved since then.
SHEENA ALLEN: Yeah, so the company I thought about the idea in 2016. The idea came from just going to bigger cities and seeing how they only accepted debit cards and cash. credit card. Then when I got home to Mississippi, where I’m from, people only carry cash. So we did two years of research, which took us to the end of 2019, the end of 2018, the beginning of 2019, where of course we started to build. And sort of go into the neo-banking space. But the pandemic has struck, of course, and we’ve seen all the need, of course, to expand outside of just I need access to a bank account.
And so as a business we saw, hey, this is where we start to offer not just debit cards, how do we deliver education? How do we go into payments? How can we provide things so that people, if they are practically pushed into a cashless economy, what they need to be financially healthy? How to put them on a, not on a sprint, on a marathon to create generational wealth? And so I say that we come from, how can we be a neo-bank or offer debit cards to how can we build a financial system for the next generation for the people who have historically been overlooked by the traditional banking system. .
Marcellus whistle; Sheena, CapWay operates like a neo-bank. So without traditional physical agencies, without a banking license, without a charter, how can you attract new customers? And how do you get them to trust you with their money?
SHEENA ALLEN: Now the most important thing for us at CapWay, which is, I would say, not only our biggest competitive advantage, but also honestly, I think what people love about us is that we are probably totally opposed. to what you’ll even see from a neo banking or digital banking space, which is still very new. I, as the founder, am usually not what you see when you walk in as a fintech conference or when you see as a quote without a quote, a bank owner or a new bank owner.
Our education, the way we present ourselves, the information we give out, we use things that are much more relevant, more modern things. As we say at CapWay, we don’t market ourselves as your grandmother’s bank account, the way that money was used a long time ago. The times are changing. Their Appearance Changes Gen Z is a whole different breed.
Millennials, where we are now even financially, we are just a whole different space. So I think what makes people trust, what makes people love us, why people even want to try us, even though there are many options, is that we offer something different not only from the platform point of view, but from the building point of view, from the point of view of culture. We are just very different.
ALEXIS CHRISTOFOROUS: Sheena, I want to talk about your personal journey for a minute. What was it like for you as a black female entrepreneur? We talk a lot on the show about how only a fraction of the venture capital funding goes to businesses run by women, let alone women of color. So how did you find the seed money for this business? What if you could share with us who some of your investors are.
SHEENA ALLEN: Yes. Very early on this is my second business so a lot of my first fundraising which people call family and friends but for me I call it my angel and my friends came from people I met in my previous company who invested early. So like Arlan Hamilton, Backstage Capital, for example. But then as we evolve, as we grow, of course, we end up finding people who, in part, believed in what we were doing.
Second, it wasn’t just about saying it for PR, they really want to invest and help women of color, people of color. And so some of these investors that we have now, they’re going from Initialized Capital, SoftBank. SoftBank Opportunity Fund is one of our investors who has helped us tremendously. I mean, they’re one of those investors who, they don’t like micromanaging, but they call, what do you need, how can we help you. So we were fortunate to have investors like SoftBank who, again, it’s not just lip service, it’s not for public relations. They really invested not only their money, but also their time and resources.
Marcellus whistle; Sheena, you said you saw friends and family become victims of predatory practices. Can you give us an idea 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 many people used. Mississippi actually has the largest per capita population of unbanked and underbanked residents. And it was no different for the people in my community. It was no different for my family and friends. I had the great-grandmother who kept her money at home. I had the sisters, the uncles, who were not banked. I drove my grandmother to a check-cashing place, a securities lending place.
So it wasn’t something for me that when I talk about this area, it’s not that I started CapWay because I saw an opportunity like, oh that’s a way to make money. ‘silver. It was also personal. It was again, I was the one taking my grandmother to a check-cashing place. It was about seeing family members, friends who weren’t banked and had to rely on predatory services to keep their lights on.
ALEXIS CHRISTOFOROUS: Sheena Allen, we’re going to have to leave it at that, but thank you for joining us today and telling us about your business, CapWay.
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