Financial Finesse Ventures, a venture arm for socially responsible fintech, announced that it has added OfColor, a minority-owned financial wellness platform that is focused on the financial empowerment of employees of color, to its portfolio.
This is the second investment for the first-of-its-kind social impact venture fund, which was launched last October by Liz Davidson, CEO of Financial Finesse, an independent provider of financial wellness coaching programs. Its first partnership was in November with Rayze, a philanthropy-based fintech firm founded by NFL football player Carl Nassib.
Davidson said the partnership with OfColor will amplify Financial Finesse’s existing diversity, equity and inclusion (DE&I) efforts and rapidly scale OfColor’s reach and impact. “Every single one of the 12,000-plus employer that have Financial Finesse services right now will get selected content from OfColor embedded into our digital platform so that it is available to everyone,” she said during a virtual meeting on Tuesday to announce the investment.
Davidson explained that Financial Finesse invests in companies that are transformative. “They at scale have the ability to transform millions of financial lives for the better with a particular focus on those people who need help the most,” she said, adding that the company must have a credible entrepreneur and team and has “developed an amazing product and got it to market successfully with adoption by clients and end users and very positive results.”
OfColor is one of those companies, she said. “And when you combine their mission with the success they already had, I think the work we can do together, the opportunity to have groundbreaking impact is truly amazing,” she said.
OfColor, which was founded by CEO Yemi Rose, works with large enterprises seeking to improve the financial health of employees, providing fintech tools, culturally relevant content, and financial coaching and therapy with Black, Indigenous, People of Color (BIPOC) coaches.
Rose said the platform is available to everyone, regardless of race, but it’s meant to feel safe for employees of color who are used to “engaging in spaces everyday that was not built for us.”
When Rose often gets asked why employees of color need this type of personalization, he said the answer is simple. “The reality is that our financial fragility follows us everywhere even if we make a decent salary,” he said, noting that when he was making a good salary, he was not able to participate in the retirement because of helping other family members and taking care of debt.
“The reality is if you pay two employees the same and one of them is a minority, it’s a big difference in how much salary a black or brown employee gets to keep because of things like that,” he said.
He said that black college graduates owe an average of more than $25,000 in student loans than white graduates and the median LatinX borrower still owes more than 80% of their student loans after 12 years of graduation. Further, Rose said people of color tend to not participate in their employers’ retirement plan because of the immediate need for money, and when they do participate, it is at a lower level. “And the consequence of this is that we have less money at retirement and are often forced to keep working after hitting retirement age,” he said.
OfColor, Rose said, stemmed from his view of the workplace “as the frontlines in a battle to close the racial wealth gap.” He said the aim of the business is to mimic the way the white middle-class was created, “which is through FHA and GI subsidies distributed en masse through the banking sector ... so for us, we are looking at the mass distribution through the employee benefits system and providing employees of color with subsidized tools and services."
Rose said they have been watching Financial Finesse for a long time and have admired the work the firm does. “We are really lucky to have found a partner that is not daunted, is not afraid of leaning in and is willing to go all in on this journey with us,” Rose said. “We are working together to create a shared value system and I am happy to be on this journey with Liz and the Financial Finesse staff."
In response to a question of whether they are concerned that the recent Supreme Court ruling that struck down affirmative action programs at Harvard and University of North Carolina would impact how companies feel about addressing racial wealth gaps, Davidson said it made her more excited and convicted to go through with the investment for OfColor. And she believes employers cannot afford to take a cue from the court’s ruling and ignore this issue.
“An additional barrier has been added so the time to double down on this is now,” she said. “I think it’s up to the private sector at this point to really step up and we’ve illustrated that it is absolutely in the best interest of employers to address this issue simply because of the really pervasive impact of serious financial stress on the workforce.”