Home Lending Pal will be one of five companies set to participate in the latest class for Northwestern Mutual's Black Founder Accelerator.
The Orlando-based tech firm co-founded by Bryan Young and Steven Better is one of five selected for the program by the Milwaukee-based financial services provider, which will give each company a $100,000 investment, access to venture capital partners, coaching from Northwestern Mutual executive mentors and inclusion in a 12-week program, among other perks.
Northwestern Mutual started the program in 2021 and runs it in partnership with startup accelerator gener8tor.
“Since the program’s inception, we’ve partnered with more than two dozen Black-founded startups nationwide, with program alumni going on to raise additional funding, secure contracts and partnerships, and continue to grow their businesses,” Abim Kolawole, chief audit executive at Northwestern Mutual, said in a prepared statement. “We remain committed to helping more Black entrepreneurs reach their potential and pioneer a pathway for future innovators to thrive in technology and business.”
Home Lending Pal offers a mortgage advising platform that makes it easier for prospective homebuyers to research and apply for mortgage loans. Home Lending Pal hides user identification information from lenders to eliminate lending discrimination based on race, age or sex.
Besides Home Lending Pal, other companies in the group include:
- Southlake, Texas-based Reveles
- Cary, North Carolina-based Core Ai
- Chicago-based WeSolve
- Clifton Park, New York-based Scout
The companies are part of the the first of two five-company cohorts joining the Black Founder Accelerator program in 2023. The second will be announced this summer.
Young told Orlando Inno his company in recent weeks has seen "significant user growth and lender adoption of our Fairness Alliance," and is kicking off paid pilots with national lenders like Wells Fargo, Veterans United, Rocket Mortgage, Nation's Lending and Flagstar Bank. It has more than 100 lenders waiting in its pipeline.
"Lenders are leveraging our technology, marketplace and multicultural advertising options to raise awareness about grants, down payment assistance programs and special-purpose credit programs," Young said. "Our app provides a safe space for consumers to input income, race and location data to explore their options and alert loan officers of the programs they are eligible for when they apply through our app without being mistreated. Today this is a very manual process for lenders, and they do not typically advertise down payment assistance programs at scale."
Young said the immediate next step after being selected for the program is to go after a $4M Series A equity round that will allow the company "to keep up with the rapidly scaling demand of our marketplace on both sides."
Wells Fargo, Flagstar Bank and Northwestern Mutual leaders will help the company in that round.
Home Lending Pal has six full-time and six part-time staff. Young previously highlighted to Orlando Inno the challenges of being able to secure funding as a Black founder.
A report co-authored by Federal Reserve Board of Governors Member Lisa D. Cook as well as Emmanuel Yimfor of the University of Michigan and Matt Marx of Cornell University used "image- and name-processing algorithms with clerical review to identify race" for hundreds of startup founders that were "at-risk" for venture funding in the U.S.
The report — released by the National Bureau of Economic Research — found that Black founders in high-growth startups raise only one-third the venture capital funding that other founders do in their first five years of business.
Yimfor, an assistant professor of finance at the University of Michigan’s Ross School of Business, said in a university Q&A that the top policy takeaways include investing more to get minority founders to participate in the patent process, as Black founders are less likely to have a patent. Yimfor also highlighted the importance of having Black partners at investment firms.
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