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May 24, 2023

Queer-Unfriendly?: Daylight Bank Announces Closure

A lawsuit filed by former employees contributes to the closure of the LGBTQ+ bank

LGBTQ+ banking platform, Daylight, is set to shut down its operations on 30 June, according to an announcement made by co-founder and CEO Rob Curtis. This decision comes months after an explosive feature published by NY Magazine, which focused on Daylight and brought attention to a lawsuit filed by three former employees. The article also highlighted allegations of fraud and inappropriate behavior by Curtis.

In a blog post published to Medium on 23 May 2023, Curtis writes “[...] after a long period of soul searching, I feel now is the right time to exit this market”. In the same blog, he assured customers that their money would remain safe and accessible for transfer until the end of June. Reflecting on Daylight's journey, he remarked, "[we] had a great run paving the way for US LGBTQ+ customers [...] Ultimately, though, we couldn't provide these services in a way that covered our costs". Established in 2020, Daylight raised a total of $20 million in funding, with a $15 million Series A led by Anthemis Group in 2022. The CEO expressed hope that larger banks would continue Daylight's legacy.

Former employees’ allegations included age and wage discrimination, whistleblower retaliation and fraud. Terrance Knox, a Black employee, claimed earning $85000 lesser than his White colleagues. The lawsuit also asserts that Curtis faked a projection that Daylight would process $500 million in transactions by the end of 2023.

Following the publicization of the lawsuit, Curtis provided a statement to TechCrunch in an effort to address former employees’ complains. While he expressed regret that Daylight failed to meet certain “personal expectations of startup culture”, he asserted that the claims were “fabricated”, and Daylight is fully prepared to defend itself in court.

Daylight initially positioned itself as a company focused on promoting financial equity and inclusion for the LGBTQ+ community, aiming to provide products and services for an estimated 30 million queer Americans. Although the startup planned to develop a platform that offered rewards to members who supported ally merchants, not all promises are kept.

Kriti Swarup
Kriti Swarup
Content Writer at TechNews180
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