Alza, a new startup founded by Arturo Villanueva, aims to provide affordable and inclusive financial tools to immigrants in the United States. Villanueva, who previously worked on Stripe’s financial partnerships team, realized the need for better banking services for immigrants after experiencing the difficulties himself. Alza officially launched today after two years of building its products, securing partnerships, and developing compliant infrastructure.
Key Takeaway
Alza is a startup that offers affordable and inclusive financial tools for immigrants in the US. The company differentiates itself by providing cross-border remittances to Latin and Central American countries directly through its app. With a diverse founding team and strong investor backing, Alza is well-positioned to cater to the growing market of underserved immigrant populations.
Addressing the Unique Needs of Immigrants
Alza is joining a growing number of startups that focus on providing financial services to specific immigrant demographics in the US. However, what sets Alza apart, according to Villanueva, is its ability to send cross-border remittances to over 20 countries in Latin and Central America directly through its app. Users can choose between bank transfers, cash pick-ups, or transfers to a debit card, and these transfers are generally same-day and offered at a competitive rate. This streamlined process eliminates the need for immigrants to set up multiple accounts and reduces entry barriers to the American economy.
Additionally, Alza offers users an FDIC-insured checking account and debit card. The startup has also made efforts to provide a more inclusive verification process, allowing individuals to apply for an account using a variety of IDs, including Social Security numbers, ITINs, international passports, and national ID cards from Latin American countries. The service is available in both English and Spanish to ensure accessibility for all users.
Working Within Regulatory Frameworks
While Alza provides banking services, it is important to note that it is not a bank itself. The First Internet Bank of Indiana provides the banking services and issues Alza’s card, while cross-border transfer services are provided by The Bancorp. Alza operates within the framework dictated by various regulatory bodies, including FinCEN Chapter X, Dodd-Frank, Reg E, Reg P, and OFAC regulations. The startup’s revenue model will consist of interchange fees, interest on deposits, and a small fee on cross-border payments.
Investments and Growth Potential
Alza has received a seed funding of $6.6 million, led by Thrive Capital, with participation from prominent backers such as Henrique Dubugras (co-founder and CEO of Brex), BoxGroup, Sebastian Mejia (co-founder and president of Rappi), Cristina Cordova (COO of Linear), and Sarah Heck (former White House advisor and head of entrepreneurship at Stripe). The startup’s founding team includes individuals with extensive experience in engineering and fintech.
With the economic output of Latinos in the US reaching $2.8 trillion in 2020, there is a significant market opportunity for Alza to serve this demographic. Despite their economic power, many Latinos are underserved by traditional financial services and rely on costly alternatives such as money orders, check cashing, and payday loans. Alza aims to change that by combining its team’s lived experience with their professional expertise to build a world-class company.
