SoLo Funds
 | |
| Industry | Financial technology |
|---|---|
| Founded | 2018[1] |
| Founders | Travis Holoway, Rodney Williams[1][2] |
| Headquarters | Los Angeles[1] |
Area served | United States |
Key people | Travis Holoway (CEO)[1][3] Rodney Williams (President)[4] |
| Products | Peer-to-peer lending |
Number of employees | 90 (2023)[5] |
SoLo Funds operates a community peer-to-peer lending platform, founded in 2018.[1] The company announced 1 million registered users as of 2023, making it reportedly the largest black-owned financial technology company in the United States.
In 2024, the Consumer Financial Protection Bureau (CFPB) sued the company over its lending model,[6] citing that SoLo "misleads borrowers with advertising and disclosures that falsely tout no-interest loans" while subjecting its users to routine fees that result "in an exorbitant total cost of credit".[7]
History
[edit]SoLo Funds was founded in 2018 in New York City by Travis Holoway and Rodney Williams.[5] Holoway and Williams wanted to provide short-term and small dollar loans as an alternative to banks and high-interest credit cards.[5] The company was launched through the Hillman Accelerator in Cincinnati, and, in July 2018, they were accepted into the Techstars Kansas City program.[8] In January 2019, the company relocated to Los Angeles.[8]
In 2019, the initial version of the company ran out of money and shut down.[4] The founders relaunched the company in April 2020.[4]
In November 2021, the company earned B Corp certification.[9]
In April 2022, the company released the digital SoLo Wallet, allowing customers to add or access funds to their bank accounts and debit cards.[10]
In 2023, the company announced an investment from investors, including tennis player Serena Williams's Serena Ventures.[4] Also in 2023, the firm made CNBC's Disruptor 50 list.[1]
In February 2023, the company reported over 1.3 million downloads of its app, claiming to be "the largest and first Black-owned personal finance platform".[4] The company also reported it had processed over 600,000 loans, accounting for $300 million in transaction volume.[4]
In February 2024, the company reported almost 2 million users of its app.[9] In July 2024, CNN Underscored editors rated SoLo Funds as the best peer-to-peer lending app.[11]
Controversy
[edit]The company functions via a peer-to-peer lending platform, claiming that its loans are interest free.[12] However, SoLo Funds has been involved in several legal cases over alleged misleading marketing about its business model.[1][6][13][14]
In May 2023, the company settled regulatory cases in California, Connecticut and Washington DC, over allegedly misleading consumers about interest rates and fees as tips and donations.[13] The company defended its tipping and donation model, but paid some penalties and agreed to make disclosures about tips and donations being voluntary.[13]
In December 2023, Maryland regulators raised similar allegations.[13] In May 2024, the Consumer Financial Protection Bureau (CFPB) sued the company over its lending model.[6]
In July 2024, Pennsylvania Attorney General Michelle Henry announced a settlement with SoLo Funds for a regulatory case similar to those brought earlier by other states.[14] The settlement, in the form of an assurance of voluntary compliance, required SoLo to pay a penalty and modify its business practices to comply with Pennsylvania law.[14]
In October 2024, a federal judge denied SoLo Funds’ motion to dismiss the CFPB ruling.[15]
References
[edit]- ^ a b c d e f g staff, CNBC com (May 9, 2023). "50. SoLo Funds". CNBC.
- ^ Clifford, Catherine (July 5, 2018). "This 34-year-old went from a six-figure corporate salary to $100,000 in debt running his start-up — here's what he learned". CNBC.
- ^ "Meet App-Based Loan King Travis Holoway". Lifewire.
- ^ a b c d e f Hall, Christine (February 28, 2023). "Serena Ventures backs SoLo Funds as finance platform tops 1M registered users". TechCrunch.
- ^ a b c "Tech entrepreneur from Baltimore started the nation's largest Black-owned fintech platform, a peer-to-peer microlender". December 3, 2023.
- ^ a b c "CFPB Sues SoLo Funds for Deceiving Borrowers and Illegal'ly Extracting Fees". Consumer Financial Protection Bureau. 17 May 2024.
- ^ Kaplinsky, Alan (16 August 2023). "CFPB files and prosecutes yet another enforcement lawsuit using funds obtained in violation of the CFPB's enabling statute (Dodd-Frank Act) and the Constitution". Consumer Finance.
- ^ a b "Cincinnati financial tech startup relocates to Los Angeles". Cincinnati Business Journal. January 22, 2019. Retrieved July 25, 2024.
- ^ a b "SoLo Funds nears 2M users". Banking Dive.
- ^ "SoLo Funds releases the SoLo Wallet and seeks to empower borrowers". ZDNET.
- ^ "The best loan apps of July 2024 for small-amount borrowing". CNN. July 12, 2024. Retrieved July 25, 2024.
- ^ "These 2 Black founders aim to offer a fairer alternative to payday loans". Fast Company. February 18, 2021. Retrieved July 25, 2024.
- ^ a b c d "Maryland regulators investigating online lending marketplace started by Baltimore native". December 12, 2023.
- ^ a b c "AG Henry Reaches Settlement with California-Based Lender over Alleged Illegal Tip and Donation Scheme, Saving Pennsylvanians Hundreds of Thousands of Dollars".
- ^ Weinberger, Evan (18 October 2024). "SoLo Funds Loses Bid to Dismiss CFPB Case Over Agency Funding". Bloomberg Law.