Welcome back to the second installation of our Fintech Founders & Leaders series. This month, we interviewed Vrinda Gupta of Sequin (YC S21). Sequin is a debit card for women that builds credit as you spend. Before Sequin and Y Combinator, Vrinda received her Masters of Business Administration from University of California, Berkeley, Haas School of Business. Prior to that, she spent five years at Visa, working in product management and strategy to design, launch, and scale Vida credit cards including the wildly popular Chase Sapphire Reserve Card.
Sequin was born of personal experience. Despite working at Visa for years and developing one of their most popular credit cards, Vrinda was rejected when she applied for the very same card she had helped build. A lifetime of careful spending to avoid debt and budgeting was negated in the eyes of credit lenders, because none of the spending had happened on credit. She went on to found Sequin, in order to "help women get the credit they deserve." Read on for Vrinda's personal learnings from working in fintech and some truly brilliant insights into the financial services space.
BE: Just to start out, I did a bit of background research and read about your experience working at Visa and then being denied a credit card there. Keeping that in mind, what is the biggest hurdle that you've faced building Sequin and overcoming something like that?
VG: Yes, definitely. So, yes, I started off my career working at Visa. And I worked there for almost six years building popular credit cards, including the very popular Chase Sapphire Reserve. When I went to apply for the card, I was rejected. And, you know, that came down to the fact that credit scoring and credit approvals don't take your income into account. What happened was, I, like many other women, had been using my debit card primarily. I was using my dad's credit card, which wasn't actually building my own credit in my own name. So because of the debit card, because of being that secondary user on a credit card, I lacked credit history. So when I went to apply, I got rejected, regardless of my income.
When I looked at Visa data, I saw that 70% of women were putting their spending on non-credit building tools, like debit cards, or credit cards in other people's names. And that was leading to women having a bunch of negative credit experiences disproportionately throughout our lives. Some of those are: having lower credit lines, getting rejected more often, paying higher interest rates.
There's also this issue that the rewards cards that I was building at Visa were for, I guess you could call it a prototypical cisgender, white male, traveler. So that's why there's airline lounge access and all these travel benefits. Of course, as a woman, you know, I love to travel as well, but I was also spending in really fundamentally different categories, like retail, beauty, pharmacy and health care. Those are categories that weren't really being represented, even though that's where women are more likely to shop. So I just thought, women are having these negative credit experiences, not because we're worse to lend to, but because the way that credit reporting works actually reflects some of the systemic biases against women, and makes us look more risky than we are. So I just felt like there was a huge opportunity to actually center on women for the first time when it came to financial services.
To me, credit is at the center of it all, where you really do need credit to achieve all of your life's goals. It became this issue of opportunity for me, and I started thinking a lot about how credit is very directly equal to opportunity in this country. If you don't have that, then you really are at a disadvantage. So it was this kind of a conviction building exercise for me where I had this personal experience of getting rejected, and I looked at the data and saw this was happening to 70% of women who were having negative credit experiences. And then I kept on reading more and more about how women are really the spending powerhouses, and just felt like there wasn't really a tool that rewarded our values, but also really guided us through the system and helped us understand how exactly to build credit and how to navigate ourselves through the system. So I left Visa, I went to business school, and I started Sequin, after a Medium article I wrote went viral about this exact experience. Now I have gotten a bit of investment from angel investors who are 92% women, which is very cool and very atypical in Silicon Valley so fast. After that, it was off to the races. So I mean, there's so much more I can say, but I'll pause there.
BE: Well, thank you for that lovely background. I think especially what really strikes me as remarkable is the fact that most of your investors are women. I also recently read your interview in FinTech Magazine. Some of the issues that you've talked about as being really endemic to the financial sector, specifically around gender issues, like in the article you mentioned the ways in which the US financial system is heavily weighted towards men. The example that you gave in your own personal life is not being able to get a credit card with the very company that you worked at. I'm sure along the way, you've heard stories from other women along these lines, do you have any stories that you'd like to share or anything particularly striking that you've seen these gaps in the system?
VG: Yes, absolutely. I think what's been both heartbreaking, but also is the fuel that keeps me going every day is talking to these young, ambitious women who are so deserving of being included in the financial system. And so many of them say, “okay, I'm, I got my first job, I am ready to be financially independent, but don't really know where to start when it relates to building credit.” And so, they're saying, “Well, I ended up getting a credit card, because I wanted to build credit. But I didn't realize that there were all these kinds of traps in your traditional credit card, and I ended up getting into a lot of debt. I missed a few payments by accident, because I didn't understand how to use auto pay. And now I have paid a lot to my credit card company. And all I wanted to do was build credit.”
So it really broke my heart to hear young, ambitious women trying to do the right thing by building their credit, but then falling into some of these traps, around traditional credit cards that are disproportionately impacting women like late fees, etc. So that was one spectrum, and then on the other spectrum, I spoke with women who are a little bit older. There's one that stands out to me, there's this older woman who had suffered a pretty bitter divorce, and she had all of her credit, under her husband's name. After they got divorced, she was really left with nothing. And he had made some credit mistakes, so not only did she not have credit in her own name, but her credit was actually negatively impacted by his lack of using credit responsibly. She was just completely torn up. She was really in a tough situation as she was going through this big financial event. And so she was going through that, struggling with getting credit, and the thing she kept saying was, “I wish I had known, had I known I would have been able to avoid this situation.”
I think it's seeing both ends of it, where it's young women getting into the system, trying to do the right thing, but then getting the backlash of these credit tools. Then also on the other side, really seeing some of the impacts of not having credit in your name or not understanding how to build that effectively. It’s just something that really felt like – these are women who are absolutely deserving of credit and the tools that they need to build it, they’ve just never had access. So those are just two, I mean, I've heard hundreds of stories like this, but those are the two that really broke my heart. And that's what I think about every day when I wake up to go to work and build this company.
BE: Absolutely. I think financial education is a big issue in this country, specifically for women. A big part of our brand and marketing at Mooch has been focused on education, be it fifteen second TikToks, our free spreadsheets on Pinterest, etc. just because that's really the gap in the ecosystem we see. In a lot of the content I read on your website, you talk about financial freedom. And after hearing your stories, the common vein that I hear is that there are major blockers to financial freedom for women, be it using spouse's credit, or just not knowing better. How is sequin going to address these issues? Besides the ability to build credit through a debit card? How is Sequin going to have financial education programs? Where do you see the vision for that heading?
VG: Yes, absolutely. I think the tool that we've built is really a first-of-its-kind product geared towards women, where we really are meeting women where they are at with the safety of a debit card, but allowing each of those purchases to build credit. And also making sure that those avoidable credit mistakes like interest and late payments and fees, that's not something that is allowed in our product. But the other side of that, to your point, is not just creating this product that is building your credit and doing it safely, it's also helping women understand how exactly the system is built, and understanding what they can do to make sure that they don't fall into these traps of avoidable credit mistakes. So they actually feel empowered because they understand how the system works, then they can make the best decisions for themselves as well.
One of the pieces that we really love about our product is we offer credit power hours, which are community sessions, basically these community-led workshops. Essentially, what we do is we bring in women credit experts, including myself, my background is Visa. And we talk about different topics – we have it split up into a kind of Credit 101 – what is credit? What goes into your credit? What are some of the factors of bias against women? And then on to 201, how exactly does the system work? Who's responsible for what? What are the things that you can do? Let's say you do make an avoidable credit mistake, can you call your bank and ask for forgiveness for it? And then there's this 301 section that talks more about for example, let's say you have built your credit effectively, and use credit responsibly. Now, how do you think about calculating rewards? How do you get the best credit product for you? So that's something that's really special in our offering is that we've been lumping it all together at Sequin University. So we have our credit power hours, which are these webinars, credit webinars, led by experts. And then we also have a really active Slack channel where women will share their credit experiences in a really safe space and are able to have a platform to talk about credit, freely and without judgment. And then lastly, we have our credit therapy sessions, which are one-on-one sessions with me or with other credit experts, where you can just share what your credit goals are. If you have any questions about credit, or anything you just want to share, we celebrate it when we have those as well. So this is all part of the financial literacy and empowerment conversation, and all of this is a really core offering in our platform. We didn't want to just be one or the other, we wanted to give you a tool that made credit building foolproof, and then also give you the tools to feel confident as well for navigating the system.
BE: It's phenomenal to hear that you're so focused on community building, from those Slack channels to your power hours already from the very start. So something else I'd love to ask you about is the actual benefits of Sequin. I'm on the waitlist for the card, so I can't wait to test it out as soon as possible! You previously mentioned how traditional credit cards have very different realms of offerings, it's mostly travel-focused, dining or gasoline. What is Sequin going to provide? How are those offerings and benefits going to be different than traditional credit cards?
VG: Yes, absolutely. So there are four kinds of tenants that we've been talking about that makes Sequin different. The first is obviously, this debit card that builds credit and gives you the best of both worlds. It's debit, it's safe, you know how it works, but it's actually building your credit without the “gotcha.” So that's one. The second is, as you mentioned, our rewards and this is where it's really fun. We've been talking about our rewards as a way to pay back some of the pink tax and essentially, the pink tax is a name for an absurd cost of everyday products and services that women pay 42% more than men for. These are the exact same product as a man would buy, but because it's marketed to women, it's just marked up. So one is getting some discounts on pink tax categories, including retail, beauty and pharmacies, we have a whole list there, which is really exciting.
Essentially what we do when you sign up through Sequin is we give you a $50 cash credit to offset some of the cost of the pink tax. The second thing we have is one percent cashback on every dollar you spend – your traditional debit card does not give you rewards. So it's pretty cool to be able to get some of that cash back. And then we also have a bunch of partnerships with amazing women-founded companies that will give you discounts on their companies. But also we do workshops with them across topics like mental health or personal branding, we have a plant care delivery service, and we're just talking about – how can a credit card really help you level up as a woman, and how do we help you reach your goals as well? So that's our rewards offering.
Then third, we do our credit reporting differently. There's a factor in credit reporting called credit utilization, which makes up about 30 to 35 percent of your credit score. Essentially, because women are getting lower credit lines, our credit usage looks higher, even if we're spending the same amount. So that makes our risk look artificially inflated. We just don't report that at all to credit bureaus, which have been really biased against women and traditional credit products. And then lastly, there's no interest and no late fees, we just try to keep everything as transparent as possible. So we have this very transparent pricing model where either you can pay an annual fee and that fee gets paid back with cash rewards in full in the first year, or a monthly fee, like a traditional subscription. So I just want to keep things really transparent. There's no “gotchas” that you're going to be surprised about. So those are kind of our four pillars.
BE: Wow, very cool. I'm especially impressed to hear about the difference in how you report scores because I think that that's something that has affected me personally, because if you get a lower credit line approved, that ratio is always going to be off. So it's really awesome to hear that you're addressing that. So just wrapping up here, I just wanted to ask you a little bit about what your intentions are for the New Year, this could be personal or professional. And even beyond the New Year, your intentions for Sequin 5 to 10 years down the line, what the future of Sequent looks like in the FinTech space?
VG: Yeah, absolutely. I'll start with Sequin. That's what personally, I'm really excited about. Sequin is going to truly revolutionize finances for women, and actually put women at the center of finances for the first time ever in history. Some of that background, women could be rejected from a credit card without a male cosigner until 1974, which really wasn't that long ago. These products were really never made to center on women. Now it's not enough to just change the color on a card and say, “alright, this is marketed towards women.” It needs thinking about how this product affects women? How does it reflect societal biases, and in our case, correct for that? So, as we think about that, we're starting off with our debit card that builds credit, because everything really starts with credit. You need credit to get an apartment, sometimes when you're applying for a job that they check your credit. And of course, for all the cars and homes and all those life goals that we have, credit is really important. But even beyond that, thinking about more traditional credit products like premium credit cards, even thinking about mortgages, where women are more likely to pay on time, but we're getting higher interest rates on mortgages. So correcting for some of that, and then giving them interesting products that don't really exist today, like loans for maternity. That's not something that is out there on the market.
What's very cool is that we can service a woman from her first paycheck, throughout her life and just be that trusted place where when you have a life goal, that life goal is met. Anything attached to a financial goal as well, we’ll actually help you get there and in a way that you can trust and, and really guide you through the system in a way that is not really happening today. So that's kind of a 5 to 10 year vision to really just rethink finances for women, for the first time, which I'm really excited about.
In terms of a personal goal, I think just infusing more joy into every day, I think all of us are in this very interesting period in time where there's some unique stressors. And I think, especially being an entrepreneur in a very male dominated space and not to go too much into, the fact that there aren't very many women in the space, as you know, the startup ecosystem is very male dominated, the venture backed system is very male dominated. Also, I'm a first generation immigrant, I'm a person of color. And so, there are these ways that this journey has uniquely impacted me. So, I do view those as my strengths as well, because I think it gives me a strong sense of empathy for the person who we're building for as a team, but I think also, it's really challenging. And so on that – just infusing a bit more joy into my every day, and just finding those moments of self care and thinking about what are some of my non-negotiables every day, like getting outside, making sure I'm working out, making sure I'm talking to a loved one. That's what I've really been focused on just for my own mental health and my own self care this year. So I think those things go hand in hand. You know, me feeling good means that the products, that my team, and everything I build are also infused with joy. Yes, that's my personal intention that I hope flourishes into Sequin as well.
BE: I love that, it's been a long two years of this pandemic. So it's great to hear so much joy and positivity already. That's it for my questions today. I just wanted to thank you again, for your time. It's been really incredible speaking with you.
Loved this interview? Read more interviews from our Fintech founders & leaders series here.