• June 9, 2023

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Fast approaching its sixth year of operation, Brazilian digital bank Conta Black is accelerating its journey towards creating an entire financial ecosystem focused on black consumers. With an approach that blends online and physical strategies, the fintech aims to offer services such as credit and financial education to its target audience.

Founded in 2017, the São Paulo-based company was around before the emergence of the first Brazilian unicorn – mobility firm 99, acquired in 2018 by Chinese conglomerate DiDi – and before the largest operator in the digital banking space in Brazil, Nubank, gained real traction.

Even though the largest market in Latin America has seen a flurry of neobanks over the last few years, it is estimated that the country still has 35 million unbanked consumers, according to a study by Americas Market Intelligence and Mastercard. Of the Brazilians without a bank account, nearly 70% are black, according to data from a 2018 study by research organization Instituto Locomotiva commissioned by black entrepreneurship network Feira Preta.

By tapping into that massive pool of individuals excluded from the financial services system, Conta Black has amassed 30,000 consumers, primarily based in the outskirts of major cities across Brazil. The aim is to boost that customer base to 100,000 within 18 months. Currently valued at around 30 million Brazilian reais ($5.6 million), the company is looking to raise 6 million Brazilian reais (approximately $1.1 million) before year-end to propel its growth plan.

“When we compare our objectives with the trajectory of other neobanks that reached 1 million consumers within six months, our goals are quite conservative. We believe we can get to that point very quickly, but we also know that getting to that point requires a significant investment, both in marketing and in technology, to meet consumers’ evolving expectations,” said the firm’s co-founder and chief executive Sergio All.

An evolving proposition

Conta Black started with a pre-paid credit card for the black Brazilian population – a parcel of the population that transacts around 1.7 trillion Brazilian reais ($319 billion) a year in goods and services, according to research by Instituto Locomotiva. At that point, there was no technology involved in the product: according to All, the main goal at the start was to break a paradigm by providing access to financial services to black individuals rather than focusing on immediately going digital.

“We developed the MVP at a time when the market had started to make the transition from traveler’s cheques into cards. I thought this could help the afro descendent entrepreneurial community in Brazil a great deal, and since around the 70s, the dream of my people had been to have our own bank. So our predecessors paved the way, and I just continued the work”, All said.

The company’s offering then evolved into a digital account supported by Banco BV and the launch of the Conta Black app in 2019, a year when the democratization of financial services was moving at full speed in Brazil with a fast-growing fintech scene. Conta Black was ready to plow resources from a private investment round into customer acquisition, then the Covid-19 pandemic the following year forced a rethink of the business model. The bank account then became a means to an end, providing consumers access to a range of services such as insurance, as well as payments, charging, and other functionalities geared at entrepreneurs.

“We repositioned our product to cater to the needs of our customer base: when you consider our clients are black consumers from the outskirts, they need financial products and services that are specific to their realities. It also became evident to us that the pandemic impacted black professionals and entrepreneurs more severely”, said the company’s co-founder and chief operating officer, Fernanda Ribeiro.

Conta Black is also aiming to provide financial education to its client base as a way to break down barriers caused by the structural problems the Brazilian black population experiences. “Usually, the black population doesn’t have a long-term financial relationship or planning around money because they don’t know how long they might be around to see the results,” said Ribeiro, citing data from the Latin American School of Social Sciences (Flacso) that a young black Brazilian man gets murdered every 23 minutes in Brazil.

Among the initiatives on the financial education front, the company has toured Brazil with financial education workshops and is setting up consulting hubs in universities and slums in partnership with non-profit organizations, dubbed Black Spaces. According to the COO, most incumbent institutions and even new players in that space have ignored the need to provide financial education and commercial offerings aimed explicitly at black consumers.

“Our work has been around developing financial products and services from a black perspective, with partnerships with companies that want to co-create these offerings. We know there is a lack of black people in decision-making positions in organizations, but we also know there are good intentions to change the current reality. So we are on the lookout for allies”, Ribeiro pointed out.

As well as evolving the digital product, building a physical presence among its customer base is crucial for Conta Black. Alongside Ribeiro, All has recently spent a few weeks in the United States meeting potential investors under a program facilitated by entrepreneur Paulo Amazon, CEO of Global Amazon, a US-based English school focused on Brazilian students. The goal was to seek partnerships and capital.

According to All, the idea is that the Black Spaces will become venues focused on education and customer experience. “When observing the format of the Apple Store in New York, I concluded that the way to go for us is to build pleasant spaces where people can build a relationship with the product, maybe pay their bills, and attend a financial education workshop. Being present offline and online strengthens the bond with the customer and contributes significantly to our overarching goals, ” the CEO noted.


According to Ribeiro, the proximity between Conta Black and its customers is one of the critical points of its unique selling proposition. “There are many digital banks around that have a technology set-up that is way better than ours. But we are a love brand for most of our clients: when we started, people would pay to have our card”, the COO pointed out, adding that despite the fact the fintech’s client age profile varies, there is a significant amount of older customers.

“[Our older customers] were protagonists of the first black activism movements in Brazil and see in Conta Black their dreams coming true, and identify with our purpose,” the executive said.

International opportunities

As well as banking the unbanked, providing financial education and positioning itself as a financial services hub, the company is also eyeing the credit provision space. According to data from the International Development Bank, black consumers are denied credit four times more often than white consumers with the same economic profile. In addition, Ribeiro noted that 70% of the economically active adults in Brazil are in debt, most of whom are black.

The issue of racism in financial services is something that All has experienced personally. As the chief executive of an advertising agency in São Paulo, the executive was looking to buy several Apple computers as part of a company-wide technology upgrade in 2008. According to the executive, the loan request got declined even though he had a financially healthy business and a good credit score.

That experience is one of the situations that sowed the seed of what would later become Conta Black. A few years later, All met his wife Ribeiro, a tourism specialist who had stepped down from a management role at one of the main Brazilian airlines, who joined as a co-founder. Before launching the fintech, the pair started AfroBusiness, an organization that plugs black entrepreneurs into the supply chain of large organizations such as Carrefour, Google and Meta. As well as consulting services for corporations, the non-profit also provides education for entrepreneurs, many of whom become interested in Conta Black’s products.

“At the same time our paths crossed, they also crossed with the trajectories of other black entrepreneurs. Sergio and I then thought this could be a real business and have been hacking the system ever since, starting with the provision of an entry point into the financial system for entrepreneurs that frequently couldn’t even open a bank account”, Ribeiro said.

Ribeiro noted that her fintech accumulated plenty of insights about that audience over the years. For example, even though individuals represent 60% of Conta Black’s client base (businesses represent the remainder), the COO said account usage patterns reveal that most of these consumers are, in fact, informal entrepreneurs.

When it comes to the inevitable comparisons between Conta Black and other fintechs that have managed to build a much larger customer base ia lot faster, the executive argued that the company has focused on growing sustainably. “In addition, we can’t ignore the fact that investments in startups led by black people is a lot smaller”, she said. According to a study by Brazilian accelerator Black Rocks Startups and Bain & Company released last year, only 32% of black founders have received investment to support their businesses, compared to 41% of non-black founders.

According to All, while access to capital is the lever the company needs to grow faster across the technology, marketing, and education fronts, Conta Black’s pitch is that its business also satisfies the demand from certain backers for investments that tick the boxes when it comes to environmental, social and governance (ESG).

“As well as having a business proposition that focuses on ESG principles, we are also participating in the discussions with the Central Bank and the Brazilian Fintech Association on what can be improved and how can we become an even more attractive business. It is impossible not to think of how far we could go with extra capital”, the entrepreneur noted.

During their travels in the US, the entrepreneurs advanced talks with several potential partners around potentially launching in Brazil through Conta Black. “We have noticed that [financial services players in the US] are looking to go beyond the same old offerings. The opportunity of our target audience was also clear to them since more than half of the Brazilian population is black. There is a great deal of openness from the players in the US and the ecosystem there is also a lot more inclusive, with black people in very senior roles, and that makes all the difference”, All said.

When it comes to the size of the investment Conta Black is looking to raise, the founders – who are part of the entrepreneurs supported by Google’s Black Founders Fund in Brazil – said they could be seeking more but are cognizant of the currently unstable market conditions, which tend to be even harsher for black founders. According to data from Crunchbase, funding to black-founded US startups plunged from $1.2 billion in the first quarter of 2022 to $324 million in Q2. “We opted to downsize the round as a strategic move, given the ongoing challenges around capital availability. We also retain 100% of the company, which enables us to grow more sustainably while also opening up the opportunity to have more rounds in the future, ” Ribeiro noted.

Commenting on expected achievements for the next 12 months, All expects Conta Black will have “moved a few wagons and be in front of the fintech industry’s train in Brazil”, by significantly boosting its client base. “I want to be talking about a company that is different, even more, active when it comes to changing realities, and especially, more educational”, the chief executive said. “People often ask me whether I have a Plan B concerning Conta Black. My answer is always the same: my Plan B is to make it work.”


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