Boston-based startup Stackwell Capital Inc. has brought in new investors as it prepares to launch an app aimed at eliminating the racial wealth gap.
The digital investment company announced the close of its first-ever funding round — a $3.5 million seed round led by Michael Gordon, president of Fenway Sports Group; Jeremy Sclar, CEO and chairman of WS Development; and The Kraft Group. Other investors in the round include Sam Kennedy, Boston Red Sox CEO; William “Mo” Cowan, former U.S. Senator and newly appointed MassChallenge board chairman; and Corey Thomas, chairman and CEO of Rapid7.
Omosefe Aiyevbowman, vice president of product, said Stackwell’s robo-investing app will offer a “simpler, more accessible and intentional pathway to increase investment participation in the Black community and ultimately promote Black wealth.”
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Users complete a questionnaire so the app can learn about their investment goals, risk tolerance and stage of life. The app will then recommend one of three investing portfolios, Aiyevbowman said. Users can then set a recurring monthly contribution. Stackwell also provides educational content to demystify the investment process.
“There’s no individual stock picking like other apps. There’s no market watching. You set a commitment, you stick with it and you learn as you earn,” Aiyevbowman said.
Stackwell founder and CEO Trevor Rozier-Byrd said the funds would be used to hit product development and go-to-market milestones, including the launch of the app this fall, and building out their team.
Waiting list for downloads
“I think one key thing that permeates across everything that we do in our business is intentionality. And I think the same is true with respect to the investors that we have brought on,” Rozier-Byrd said. “The group…definitely believes wholeheartedly in the mission we’re trying to pursue at Stackwell and they believe in our strategy.”
Rozier-Byrd is a former State Street managing director who previously led corporate transactions at two big law firms. He left State Street last August to start Stackwell. At the time, he told BostInno his goal was to make Stackwell the preferred choice for end-to-end banking and financial services within the Black community.
Nearly 50% of Black households across the U.S. were unbanked or underbanked in 2019, according to Brookings. The Federal Reserve Bank of Boston’s oft-quoted study from 2015 found that Black families’ median net worth was only $8 compared to almost $250,000 for white families. Earlier this year, the bank and several partners launched a multiyear research effort to look at wealth disparities, which community leaders said have not been improving since 2015.
There is a $10 account minimum and the app charges $1 per month to use. The company has a waiting list for people interested in downloading the app.
Rozier-Byrd said Stackwell has seven full-time team members and will use some of its new funds to hire in engineering, product, customer support and user engagement.
“(We are) making sure that we have the ecosystem in place to make sure that we are effectively supporting our users, learning from our users and really just ensuring that we’re continuing to develop the best possible product to serve their needs,” Rozier-Byrd said.
Rozier-Byrd added that Stackwell will likely complete another fundraising round later this year.
“We’ll certainly look to be opportunistic about when and how to raise additional capital,” Rozier-Byrd said. “But certainly are excited about many of the strategic opportunities that we have in front of us and we’ll obviously need to bring on more capital to fuel and accelerate our growth.”
