Onuu Wants to Improve Financial Products for Underserved Communities
Sure the latest initiatives from the Teslas, Apples and Googles of the industry tend to dominate the tech news space — and with good reason. Still, the tech titans aren’t the only ones bringing innovation to the sector.
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Growing up, Felix Oritz III saw how his grandparents from Puerto Rico struggled to provide for him and five other family members in their New York City apartment.
As the first generation to seek a better life on the U.S. mainland, his grandparents did their best to keep the family afloat with food stamps, but they didn’t have the knowledge of financial and insurance systems that could have lifted the family up financially.
When Oritz’s grandmother Candi passed away in her 50s, he decided to make it his life’s work to educate those underserved and overlooked by the American financial system.
“To turn the financial challenges they faced into an opportunity to serve millions of people who are in a similar position is not only an honor, it’s a responsibility,” Ortiz said.
Ortiz teamed up with entrepreneur Ryan Wuerch to launch Onuu, which uses machine learning to offer personalized life insurance and banking products based “on you” and your data. The platform, which charges a monthly fee, also provides AI-powered financial literacy advice from a guide named Candi, a tribute to Ortiz’s late grandmother.
“This isn’t about building a unicorn, which it will be eventually. It’s about building a Fortune 500 company. That’s the mindset of Ryan and I and the people that we’re putting together,” said Ortiz, who also serves as the company’s CEO. “It’s time that we changed the paradigm of what financial and insurance products look like in a digital world.”
A veteran of the U.S. Army, Ortiz said Onuu is akin to a digital version of USAA, which provides military members and veterans with banking, brokerage and insurance services. But unlike USAA, Ortiz said Onuu offers a better user experience and, more importantly, better financial products.
To turn the financial challenges they faced into an opportunity to serve millions of people who are in a similar position is not only an honor, it’s a responsibility.”
Ortiz said he wants to open up lines of credit to people who traditionally wouldn’t qualify given that when he was a 19-year-old Army private, he couldn’t get a credit card because of his thin credit file. Onuu’s credit cards, by contrast, offer an unrestricted credit line of $500 to $5,000 with interest rates as low as 19.9 percent.
Onuu is able to offer favorable credit card terms, Ortiz said, because it has its own warehouse line of credit that is underwritten by a machine-learning-powered financial security score.
“We’re changing that paradigm through the financial security score,” he said. “We’re using a holistic view of data, non-traditional data, to underwrite and allow you to have access to products that these communities have been shunned from for many years because the firms are worried about the risk of them not paying. But how do you know that they won’t pay if you don’t actually give them the opportunity?”
Onuu also offers a term life insurance product that guarantees eligibility.
Onuu is partnering with Visa, AAA Life Insurance, Evolve Bank & Trust and reinsurer SCOR to support these products. All of Onuu’s products are built from scratch, not taken off the shelf and rebranded as some neobanks and insurtech startups do, Ortiz said.
Since opening up the waitlist for Onuu on May 2, more than 100,000 people have signed up to become early subscribers. The platform is scheduled to launch this summer.
Onuu has received $6 million in seed funding from Latinx-led VC LEAP Global Partners, with participation from Ulu Ventures, SV Latam Capital, JumpStart Ventures, Verso Capital and Capital Factory Ventures.
The company has 25 employees — 60 percent of whom are minorities or women.