The third round of PPP funding was released in December. In the first two rounds, “who got the short end of that stick? Women-led businesses, minority-led businesses. Hands down,” said Dionne Gumbs, CEO and founder of GenEQTY.
Of all vulnerable small businesses affected by the pandemic, research shows that minority-owned ones might have been most at risk. Many were in financially precarious positions even before COVID-19 lockdowns, and minority-owned small businesses often are in industries more susceptible to disruption. St. Paul, Minn.-based GenEQTY is one fintech solution to emerge that hopes to address the inequity.
And the Twin Cities, Gumbs said, is exactly where the business needs to be.
“It’s an area on the precipice of great change and elevation,” she said. “Ears and eyes are open to realizing the full potential of what we can be.”
GenEQTY isn’t just about getting things done faster. “This is about a systems breakdown, and focusing on problem solving in a very different way than what has traditionally been done,” Gumbs said. “That’s the role I think, and I hope we will begin to occupy as GenEQTY.
“There’s room in the ecosystem for great leaders, organizations and ideas to flourish,” Gumbs added.
The company offers a digital banking platform that informs, tracks and organizes business expenses, enables business owners to manage cash flow, avoid financial problems, and get relevant funding, all with predictive analytics. “Our end goal in the first two to three years is to create a mobile and digital-first platform that is uniquely tailored to a very specific part of the market that we feel is underserved.”
The thinking behind the name, Gumbs said, was to consider how to get generational wealth into the hands of more people. “I don’t think it goes specifically to racial lines or ethnicities,” Gumbs said. “I do think, however, that the portion of the market that continues to have the hardest time are women and people of color, and multicultural business owners.
“For the majority of people, this notion of being ‘self-made,’ and what it really means to be in charge of your own destiny — the core tenets of what it means to be American — gets lost if there are roadblocks within the system of financial services.”
Gumbs was born in Guyana, a country with a Caribbean culture on the northern point of South America. A daughter of immigrants, she grew up in Brooklyn, N.Y., in a house that at one point was a home to six families, not including the numerous family friends and acquaintances who needed a temporary place to stay. With her father an economist, and her mother who worked in various banking institutions that folded into JPMorgan Chase, Gumbs knew the finance world was where she wanted to end up.
“My life had always been anchored in the world and language of finance and money … and throughout my career, I have always been anchored in how to be part of the financial markets and the capital markets,” she said. It was during the financial crisis of 2008 that she began to ponder who benefited most from the markets, and who had easiest access to capital.
“The economic impact of what happens to people who have regular lives and regular businesses and who are trying to build a life for themselves — how does the financial system work for them?” she asked. “It was a very eye opening time for me.”
Founded in 2018, growing the young company in a pandemic meant that Gumbs’ business model had to pivot to a marketplace model, or a loan-matching marketplace, when the original intent was to raise capital from investors, and lend off of a capital base.
GenEQTY has alternative lending partners like SmartBuz and OnDeck, and mission-driven lenders like Accion’s Opportunity Fund, but as the operation grows, Gumbs said, it “will look to both institutions, private investors and government to help in a capital raise.”
The aim of GenEQTY wasn’t just figuring out how to cater to one demographic first as a primary point of interest, Gumbs said. It was, how do we create scale and inclusion by using technology? “That’s what the business is really all about,” she said. “How do we evolve with business owners, knowing that when you’re a woman, a person of color, a multicultural team, BIPOC, LGBTQ … there are different challenges that are involved if you’re not part of the greater homogeneity of which the institution has traditionally been built on.”
The opportunity for fintech companies to partner with traditional banks is appealing in itself, Gumbs said. A fintech algorithm blended with data can create flows to capital that become more relevant to the end customer.
Banks are typically built in silos, she said, “so if you think about the opportunity that exists within fintech today, it’s really using technology to … solve very, very big problems, not to the exclusion of traditional structures, but actually to open those boxes and silos that exist,” Gumbs said. “When you drill that down to demographics from a sub-segmentation standpoint, it just becomes that much more powerful of a story.”