Daylight, an LGBTQ+ banking platform, is closing. Its operations will cease on June 30, according to co-founder and CEO Rob Curtis.
The announcement comes months after NY Magazine published an explosive article about the neobank.. He article focused on Daylight, whose seed and Serie A fundraiser TechDigiPro had covered here and here, respectively. The NY Mag article details a lawsuit filed by three former employees, as well as alleged fabrications and inappropriate behavior by Curtis.
in a Blog posted today, Curtis said he felt like “now is the right time to exit this market” and told clients that his “money is safe and will be fully accessible for transfer until June 30.”
He added: “Daylight had a great run paving the way for LGBTQ+ customers in the US – we opened thousands of trans-inclusive debit accounts and supported the plans of thousands of LGBTQ+ prospective parents for their families. Ultimately, however, we were unable to provide these services in a way that covered our costs; this is likely to be a job for the big banks and I hope they take up the torch and carry on our legacy.”
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.
Shortly after covering the shocking allegations, the company reached out to TechDigiPro with a statement from Curtis, who responded to the former employees. Essentially, Curtis said that the company He “regretted” that “some former employees were disappointed” that the company would “not go beyond the scope” of its mission and invest its “resources to address systemic social issues affecting LGBTQ+ people.” He added: “We are equally sad that we were not able to meet your personal expectations of start-up culture and continue to wish you the best in the future.”
The former employees alleged age and salary discrimination, whistleblower retaliation and fraud. For example, Terrance Knox, who is black, claimed to have earned $85,000 less than his white peers. The lawsuit also alleges that Curtis “fabricated” a projection that Daylight would process $500 million in transactions by the end of 2023.
The CEO told TechDigiPro that the former employees’ claims were “fabricated,” adding: “We disagree with your negative characterization of our business, and Daylight is fully prepared to address these concerns in court.”
At the time of its initial raise, the company said its products were designed to promote financial equality and inclusion for the more than 30 million Americans who identify as LGBTQ+. The startup also planned to build a marketplace for LGBTQ+ businesses and a platform that would offer discounts and rewards when members shop at merchants whose actions support the queer community.
Want more fintech news in your inbox? Register here.
Have a news tip or inside information on a topic we cover? We would love to hear from you. You can contact me at email@example.com. Or you can send us a note at firstname.lastname@example.org. Happy to honor requests for anonymity.
LGBTQ+ Neobank Daylight Resigns Over Mary Ann Azevedo Originally Posted on TechDigiPro