US LGBTQ+ neobank Daylight to close down
US-based neobank for the LGBTQ+ community, Daylight, has announced that it will be closing down, with its last day of operations on 30 June.
In a statement on its website, Daylight says the decision to close down is “unrelated” to the wider banking crises taking place globally.
“We have not found a business model that allows us to sustainably provide our banking services to the LGBTQ+ community as a small company,” Daylight says. “Banking is a business that works well at scale, and as a small company we cannot identify a path toward profitability.”
However, Daylight’s decision follows weeks after NY Magazine published an explosive feature on the challenger bank, alleging inappropriate behaviour by its CEO, Rob Curtis, who also reportedly lied about the firm’s data and finances.
According to the article, three of the company’s former employees have filed a lawsuit alleging age and wage discrimination, whistleblower retaliation, and fraud.
One of the former employees, Terrance Knox, who is black, claims he made $85,000 less than his white peers. Reportedly, Curtis also “made up” a projection about Daylight saying it would process $500 million in transactions by the end of 2023.
Curtis and Daylight are disputing the claims in the suit, telling TechCrunch that the claims were “fabricated”.
“We disagree wholeheartedly with their negative characterisation of our business, and Daylight is fully prepared to address these concerns in court,” Curtis tells TechCrunch.
Founded in 2020 and based in New York, Daylight aimed to serve the over 40 million Americans who identified as LGBTQ+, offering banking products and services that they couldn’t access with legacy banks. The start-up had also launched Daylight Grow, a subscription-based financial and family planning product for queer families.
The company had raised $20 million in funding – including a $5 million seed round and a $15 million Series A – with investors including the likes of Anthemis Capital, Citibank, Visa, JP Morgan Chase, and Gaingels, among others.