Daylight, an LGBTQ+ banking platform, is shutting down. Its operations will cease on June 30, according to embattled Daylight Co-Founder and CEO Rob Curtis. The announcement comes months after NY Magazine published an explosive feature on the neobank.
The NY Mag’s piece detailed a lawsuit brought on by three former employees and also alleged fabrications and inappropriate behaviour on the part of Curtis.
In a recently published blog post, Curtis expressed his belief that the present moment is opportune for the company's departure from the market.
He assured customers that their funds are secure and will remain fully accessible for transfers until June 30.
Curtis further stated, "Daylight had an exceptional journey, paving the way for LGBTQ+ customers in the US. We successfully opened numerous trans-inclusive debit accounts and supported the aspirations of numerous LGBTQ+ individuals planning for their families."
However, he acknowledged that providing these services in a sustainable manner proved challenging, and he believes that larger financial institutions are better suited for the task.
Curtis expressed his hope that these institutions will continue the legacy of Daylight and its mission.
The company wrote in a blog post: "Sadly, despite incredible progress — opening thousands of debit accounts, acquiring thousands of prospective parents to our recently launched Grow product — we’ve reached an inflection point. Given the ever-rising interest rate environment, we are not comfortable with the economics of these third party loans — our customers would face high interest rates and high repayments, right when their child arrives,"
Founded in 2020, Daylight raised a total of $20 million in funding. Anthemis Group led its $15 million Series A in 2022. Other backers include Kapor Capital, Precursor Capital, Clocktower, Financial Venture Studio and Citi.
Interestingly, during its initial fundraising phase, Daylight expressed its commitment to developing products that aimed to foster financial equality and inclusivity for the vast number of Americans, estimated to be over 30 million, who identify as LGBTQ+.
As part of its vision, the startup had strategic plans to expand and establish an LGBTQ+ business marketplace. Additionally, Daylight intended to introduce a platform that would provide members with discounts and rewards when they patronised merchants who actively demonstrated their support for the queer community.
Earlier, former employees had alleged age and wage discrimination, whistleblower retaliation and fraud.
For example, Terrance Knox, who is black, claimed to have made $85,000 less than his white peers. The lawsuit also alleges that Curtis “made up” a projection that Daylight would process $500 million in transactions by the end of 2023.
