LGBTQ+ neobank Daylight to shut down following allegations and controversy

LGBTQ+ neobank Daylight to shut down following allegations and controversy

Daylight, a neobank tailored to the LGBTQ+ community, has announced its imminent closure. According to CEO Rob Curtis, the company’s operations will end on 30 June, a report from TechCrunch claims.

This development follows several months of turmoil for Daylight, which recently made headlines after a feature in NY Magazine revealed an internal lawsuit and allegations against Curtis.

The feature reported a lawsuit brought by three ex-employees. Curtis was also accused of alleged fabrications and inappropriate conduct within the organisation.

In a blog post, Curtis stated his belief that “now is the right time to exit this market”. He assured customers that their funds are secure and will remain fully accessible for transfer until the end of June.

Curtis reflected on the accomplishments of Daylight, saying, “Daylight had a great run paving the way for US LGBTQ+ customers — we opened thousands of trans-inclusive debit accounts, supported thousands of prospective LGBTQ+ parents’ plans for their families.” However, he acknowledged the challenges of maintaining the business, stating, “Ultimately, though, we couldn’t provide these services in a way that covered our costs — this is likely a job for big banks and I hope they pick up the torch and carry forward our legacy.”

Daylight was established in 2020 and managed to raise a total of $20m in funding. Its Series A funding round in 2022, led by Anthemis Group, secured $15m. Other investors included Kapor Capital, Precursor Capital, Clocktower, Financial Venture Studio and Citi.

Amid the allegations, Curtis defended the company and expressed regret over ex-employees’ dissatisfaction with the company’s culture and mission scope. He also disputed claims of discrimination and fraud, branding them as “fabricated” and reaffirming Daylight’s preparedness to address these issues in court.

Daylight originally aimed to promote financial equality and inclusion for over 30 million Americans identifying as LGBTQ+. Their plans included the development of an LGBTQ+ business marketplace and a rewards platform for members supporting LGBTQ+ friendly merchants.

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