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Offering credit and wealth-building solutions for Latinx entrepreneurs
Company: Camino Financial is an AI-powered community lending platform that is offering affordable credit and wealth-building solutions to overlooked entrepreneurs. The company has a team of over 100 associates across the U.S. and Latin America who uphold this vision.
HQ Location & Year Founded: Los Angeles, 2014
Founder: Sean Salas, Co-founder and CEO, is a fintech executive and visionary on a mission to empower overlooked entrepreneurs everywhere. Sean is an authoritative voice at the intersection of fintech and financial inclusion. He is host of the podcast Fundamental Fairness and contributor on Forbes. Sean is often featured and cited in industry news outlets related to the topic, including CNN, NBC Universal, and Lending Academy. Prior to co-founding Camino Financial, Sean worked at ICV Partners, a private equity fund where he invested $50 million in direct equity investments and helped manage four portfolio companies with over $250 million in combined revenue. Earlier in his career, Sean worked as an investment banker at UBS Investment Bank. Sean holds a BA from UC Berkeley and an MBA from Harvard Business School.
Funds Raised and VC Investors: $200+ million in equity and debt from Collaborative Fund, Comcast Ventures, Community Investment Management, DILA Capital, Hunt Companies, Impact America Fund, LAT VC, LL Funds, Mexamerica Ventures, and Xochi Ventures
Where did the idea for Camino Financial originate?
I am the son of an entrepreneur who immigrated from Mexico. My mom opened over 30 restaurants. I understood from a young age that the only way to build generational wealth was through entrepreneurship. I learned from my “supermom” about testing and failing fast. She would adapt and change format if needed. However, at one point, she lost the business and decided to move back to Mexico with her kids. I came back to the US at age 20 and really experienced what it is like to be an immigrant in terms of education, access to jobs, and access to capital. I was able to attend college and then got a job on Wall Street working in investment banking and then private equity (PE). However, I saw the limitations of PE in deploying capital to smaller, micro businesses. I wanted to innovate and serve the bottom 98%. I graduated with my MBA from Harvard in 2015 during the first wave of the fintech boom. I decided that I wanted to ride this wave with a mission of applying innovation to financial inclusion.
What is the key problem that Camino Financial intends to solve?
The US Latino population has a $20 billion unmet credit need per year for loans below $150k. Even for those whose credit needs are met, loans are overpriced and improperly structured. The market is massive, but it is fundamentally mispriced and there is a lack of access to affordable capital. We are creating an AI-powered platform that directly addresses this need through more accurate pricing models, coupled with a tech-enabled infrastructure to scale financing. We have built a digital brand for overlooked Latinx entrepreneurs that signals we’re building a long-lasting relationship with our members.
How are you most differentiated as a service?
We leverage technology and AI to dramatically bring down the cost of underwriting and servicing credit. We are the first nationally accredited fintech Community Development Financial Institution (CDFI) focusing on the Latino market. With lower cost pools of impact capital, we believe that we can scale our loan book in the billions of dollars through smart product design. We offer an unsecured term loan as an entry point, but are developing wealth-building tools that allow our borrowers to graduate to bigger loans.
While our focus to date has been on the micro-business segment (businesses with no more 4 employees and a median of $300,000 annual revenue), we see this as just the beginning. In fact, 96% of Latino-owned businesses are solely run by owner-operators, or Solopreneurs. Many of these will “graduate” to pursue the “American dream” and eventually take a home loan. We invested with the end goal of wealth generation for Latinx entrepreneurs.
What are the company’s key accomplishments to date?
Since inception, Camino Financial has deployed over $200 million in loans to businesses, netting a positive social return of 60 cents on the dollar. We have helped micro business owners and solopreneurs save money and build generational wealth. Altogether, we have over 100 employees and have served more than 10,000 people with our loan products.
What lies ahead in the plans for Camino Financial?
Our platform vision is to put AI-powered community lending on the map. An AI lending platform with a community element is what differentiates Camino Financial. We will offer multiple credit products and solutions to our base. This suite of products will evolve exponentially to create an experience by bridging the financial education gap with our member base. We are also creating the infrastructure to offer omnichannel and hyperlocal engagement with the communities we serve. Furthermore, big banks want to invest into this market, but don’t know how to do so. We believe that they will want to partner with organizations like Camino to align initiatives with captive audiences through what we are calling “Financial-Inclusion-as-a-Service.”
More than half of the population growth in the US over the past decade can be attributed to the Latino community. Latino entrepreneurs will make up 29 percent of the U.S. population by 2050, up from 17 percent today, reported JP Morgan Chase. If Latino owned businesses grow as fast as the U.S. average, they could add $1.4 trillion to the U.S. economy, which would add almost eight percent to the $18 trillion U.S. economy, according to a Stanford University study. The study’s authors found that when Latino entrepreneurs start a business, 70 percent of their funding comes from personal savings, while just six percent comes from commercial loans. Rather than creating barriers, we must be empowering solo and micro entrepreneurs from the Latino community. They represent job creation, innovation and the future of the country’s demographic evolution. Camino Financial is working directly to support Latino entrepreneurs and those who aspire to start their own businesses. However, the bigger picture is that they are not just helping to develop financial inclusion for this large and growing community. Camino Financial is helping to fuel the economic engine of the United States across the board for many decades to come.