Firstcard, a fintech startup founded by Kenji Niwa and Daniel Junqueira, has secured $4.7 million in seed funding to address the challenges faced by college students in building credit. The funding round brings the company’s total raised to $7.7 million.
Firstcard has raised $4.7 million in seed funding to help college students establish credit and navigate their financial journeys. The startup offers a debit card, the Credit Builder Card, with no credit history requirement or annual fees. With cashback rewards and competitive APY rates, Firstcard aims to provide equal access to financial tools and education for students, addressing a gap in the current educational system.
A Solution to Credit Challenges
According to a recent study by FICO, approximately 50% of college students do not have a credit card due to fear of overspending and application rejection. Furthermore, 29% of Gen Z consumers either lack a credit score or are unaware of their credit status. Recognizing the importance of a good credit score for students’ financial future, Firstcard aims to provide equal access to financial products, regardless of an individual’s credit history.
Firstcard’s flagship product, the Credit Builder Card, is a debit card designed specifically for college students. It does not require a credit history, annual fees, or minimum deposits. In addition, the startup offers a bank account with cashback rewards of up to 15% at over 29,000 select hyperlocal merchants. Users can also earn savings with an annual percentage yield (APY) of 1.25% with Firstcard and up to 4.25% APY with Firstcard Plus.
Expanding Financial Services for Students
Firstcard plans to expand its suite of financial products targeted at college students. The startup envisions building communities and providing financial aid and student loans in the future. Recognizing the limited financial education available to students, the company also intends to offer educational resources to help students become more financially savvy.
Future features of the Firstcard app include an artificial intelligence-powered financial advisor tool that will analyze users’ financial behavior and provide recommendations to build credit and save money. The app will also offer financial education content to empower students in managing their finances.
Monetization and Competition
Firstcard plans to generate revenue through interchange fees, a $3 monthly subscription fee for its premium offering, Firstcard Plus, and interest revenue from unsecured credit cards (yet to be launched). The startup believes that its cashback rewards and APY rates outperform those offered by its neobank competitors.
Building on Entrepreneurial Success
This is not Kenji Niwa’s first venture. Prior to founding Firstcard, he sold his previous company, i Tank Japan, a human resource platform providing internship and job information for college students. Niwa’s personal experience as an immigrant in the U.S. and his understanding of the challenges faced by college students have fueled his determination to build a solution that can make a positive impact.