Pomelo launches a new type of credit card that enables families in the US to extend their credit abroad while avoiding expensive remittance fees – an industry first
SAN FRANCISCO, Aug. 16, 2022 /PRNewswire/ -- Pomelo announced a Series Seed of $20 million in venture capital and $50m in warehouse facility for a total of $70m in seed financing, and is the first company to combine credit and international money transfer. Pomelo also announced its official launch and availability to serve its first corridor, the Philippines. Keith Rabois at Founders Fund as well as Kevin Hartz, Co-Founder of Xoom and General Partner, at A* Capital led the round with Afore Capital, Xfund, Josh Buckley, the Chainsmokers, and the Weeknd also investing in the round.
Pomelo is a new credit card that allows consumers to extend credit to family overseas to solve remittance transfer.
"Pomelo is on a mission to change how international money transfer fundamentally works," said Eric Velasquez Frenkiel, Pomelo founder and CEO. "Our goal is to help our customers establish their financial future here in the United States by building positive credit history with their existing remittance obligations, and to financially include their loved ones in emerging economies with access to modern financial instruments. For many of our customers, Pomelo is their first credit card here in the US and the very first card for their loved ones overseas."
Frenkiel brings entrepreneurship and engineering experience from his previous work at other startups. Prior to founding Pomelo, he co-founded Singlestore, now valued at over $1 billion, which he led as CEO from 2011 to 2017. A graduate of Stanford University's School of Engineering and early engineer at Meta, Frenkiel was previously named on the Forbes 30 under 30 list of technology innovators for Singlestore. Frenkiel founded Pomelo after many years of experiencing the challenges of money transfer firsthand.
The company also announced its official launch and availability of the product to serve the US-Philippines corridor. After several months in private beta, customers love the fact that the product is both free and personally beneficial.
"It's been a game changer for me. Pomelo is so much easier than sending money, and the instant feedback on my family's spending gives me peace of mind," said John Simbajon, a physical therapist who sends money to three family members in Bohol, Cebu, and Cagayan de Oro in the Philippines with Pomelo. "We've saved money with the real-time exchange rates and no transfer fees. Pomelo makes me the 'bank' for my family."
"When it comes down to it, banking is about trust," said Eric Sprink, Coastal Community Bank president and CEO. "Pomelo is weaving together expertise in financial technology with a true focus on the people at the heart of its business. Pomelo gives U.S. immigrants and their families an opportunity to build a financial future, which is why we were eager to be involved."
"It's amazing to me that something like Pomelo doesn't already exist," said Abel Tesfaye, also known as the Weeknd, who invested in the seed round. "Pomelo's focus on connecting families across borders and doing what's right by their customers is both powerful and refreshing. Investing in a company like that was a no-brainer."
The Pomelo Mastercard is issued by Coastal Community Bank, pursuant to a license from Mastercard International, and features a mobile app available on both Android and iOS. U.S. citizens and permanent residents 18 years and older can apply for the Pomelo Mastercard and invite their loved ones abroad to join their family plan. Pomelo sends their loved ones a virtual card instantly and a physical card via courier delivery, enabling the convenience of shopping online and swiping at checkout instead of handling cash.
Pomelo ensures customers get the best real-time exchange rate for each purchase made with the Pomelo Mastercard, eliminating the need for tedious price hunting. Unlike traditional money transfer services that can charge up to 6% in transfer fees, Pomelo is paid by the merchant via interchange and daily foreign exchange rates, eliminating transfer fees for its customers.
For those with low or no credit, the company offers a secured version of their Pomelo Mastercard, which allows customers to establish or build credit with the funds they would normally remit.
"Establishing credit is critical to financial wellness in the U.S., but it is often challenging for new Americans," says Frenkiel. "Even when financial activity is conducted responsibly, individuals remain credit invisible unless it can be reflected on their credit score. Pomelo makes it possible to not only save up to several hundred dollars per year, but to be rewarded for helping family. That makes Pomelo a win-win outcome for our customers."
To apply for the Pomelo Mastercard, visit www.pomelo.com.
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SOURCE Pomelo, Inc.