Credit Building Startup Esusu Reaches Unicorn Status, Giving Boost To Both Diverse Founders And Renters

With a $130 million Series B announced this morning, credit building platform Esusu broke the billion-dollar valuation barrier, making it one of the few startups with a Black founder to reach unicorn status. In the last decade, less than 2% of the unicorns that have emerged in the U.S. have Black founders. 

“There are millions of Americans who are considered credit invisible, which means they have no credit score or financial identity. [Esusu] can be a life changing opportunity for them. It can be the difference between being a subprime borrower and a prime borrower, which can result in hundreds of thousands of dollars saved in interest over their lifetime,” said cofounder Samir Goel, a first-generation Indian American. 

Goel started the company along with Abbey Wemimo, a Nigerian immigrant who, like him, experienced financial exclusion. Growing up, neither of their families had savings or credit. This forced them to rely on payday lenders that charged exorbitant interest rates.  

The financing, led by Softbank, reflects a more than ten-fold increase in Esusu’s valuation from its previous funding round last July. Since its inception in 2018, the company’s revenue has grown 600% year over year, according to Wemimo and Goel.  The startup was named to the Forbes Fintech 50 list last year.

Each month, about 44 million households spend $1,100 on average in rent—often their largest monthly household expense and likely to grow as rents soar coast to coast. However, more than 90% of renters are not able to build up their credit score by paying rent on time, which denies them access to quality financial products, and limits their ability to qualify for a mortgage, the founders say.

Esusu’s rental data reporting service attempts to solve this problem by allowing users to report rent payments to credit bureaus for free as a way to boost their credit scores. Large property managers—hoping tenants are more likely to pay on time if their credit depends on it—pay $2 monthly per rental unit for the service, along with a $3,500 set up fee. It also lures new high-quality tenants, and helps keep existing ones who want to continue building their credit, Wemimo and Goel say. 

The company now helps report rent payments for more than two million rental units across all 50 states in the U.S., up from 1 million units last year. It has partnered with some of the top property managers in the country, including Mercy Housing, WinnResidential, Goldman Sachs Asset Management and Related Companies to extend rent reporting benefits to tenants living in affordable housing.

With the latest capital infusion, Esusu plans to triple its employee count by the end of the year and bolster its efforts around risk management related to users’ personal identifiable information on the platform. In November, the fintech announced it will work with government-backed mortgage company Freddie Mac to encourage those who have borrowed for multifamily properties to allow their tenants to report rental payments through Esusu’s platform.

As they gear up for future growth, Goel and Wemimo are concerned about evictions as pandemic moratoriums wind down, but they are hopeful that the rental community will stabilize and expect continued growth of their core business. 

Though they couldn’t confirm timing, they’re expecting an IPO in the near future. “Just watch for us. We’re going to go public, and it’s going to be an exciting time for all of us,” said Goel.