Bags has announced $3M in Seed funding as they launch the small business loan discovery and management platform built by and for the culture.
The new Bags platform is built to help diverse and women-owned businesses get the working capital that they need, understand the implications of debt financing, and manage their repayment process, all with lenders that have a vested interest in supporting the community the business aims to serve. The company has already helped hundreds of businesses save time and money finding the right funding for growth.
Founded by Daniel Taylor, Ignacio Semerene, and William Hayden, the company’s mission is to increase access to entrepreneurship in diverse communities to create stronger local economies, better jobs, and generational wealth. Based on data from the Congressional Black Caucus, the median net worth for Black business owners was 12 times higher than for Black non-business owners in 2019. These data show the power of entrepreneurship to advance wealth building within the Black community.
“Access to capital is a core part of long-term business success, and in turn, wealth generation through business ownership. We built Bags to ensure every business can keep growing and feel confident they’ll find the funding they need.” said Bags CEO Daniel Taylor.
In 2019, Taylor sold Asktipster, a social data startup, to Flowcode, without raising venture capital. Following the murder of George Floyd in 2020, he joined forces with Hayden, an IPG executive, and Semerene, Chief of Staff at Monzo, a UK fintech unicorn, to build a platform to increase approval rates and amount of funds disbursed to minority and women-owned businesses.
There are 9.2 million minority-owned small businesses and 11.7 million women-owned small businesses in the US, and these segments are fast growing. Yet 99% of businesses will never raise venture capital, and, according to the Minority Business Development Agency, minority-owned businesses are less likely to be approved for financing than white business owners with the same annual receipts. In the current rising rate environment, diverse and women-owned businesses need access to fair funding that is hard to find through existing channels and unavailable from traditional banks.
The Bags platform connects businesses to mission-driven lenders, including non-profit CDFIs with a commitment to lend to minority and women-owned businesses at affordable rates. It is designed to reduce time and friction in the loan application process with integrated education and detailed guides on how to get approved.
“We know that there’s cash in the market that is meant to reach diverse groups of entrepreneurs. Our job is to help entrepreneurs and mission-driven lenders connect with each other, and to ensure that business owners have everything they need to succeed with debt financing,” said Hayden, who leads growth and partnerships for the company.
The company’s $3M seed round was raised from investors including Slauson & Co, Connecticut Innovations, and Schultz Family Foundation’s Entrepreneurs Equity Fund, following on previous investments from Altrinsic Global Advisors and angel investors Tim Armstrong, Owen Van Natta, Edith Cooper, and André Swanston, among others. The round brings total funding for Bags to $4M.
“This new round of funding will enable us to reach more businesses and continue to build the best tools to help companies grow,” said Semerene, who serves as Head of Product.
To learn more about BAGS and the work they are doing to help diverse business owners have an equal shot at success through access to capital, visit their website SecureBags.com or follow them on social media @Secure_Bags.