Discover has pledged $36 million toward its Discover Financial Health Fund, an initiative launched last week to support startups that promote the financial well-being of traditionally underserved populations.

“The solutions being developed will support and improve the financial health of low- and moderate-income people, communities, and small businesses, helping them to build a better financial future,” Discover Vice President Matthew Parks told Bank Automation News. 

The investments will be focused in the mid-Atlantic, funding emerging fintechs that will deliver social benefits to vulnerable communities while also turning a profit, according to a Discover release.

The credit card issuer and online bank partnered with the Financial Health Network, a Chicago-based nonprofit dedicated to making financial services available to underserved populations, as well as Washington, D.C.-based fintech venture fund ResilienceVC and Delaware-based B2B investor Chartline Capital, according to the release. 

ResilienceVC co-founder and Managing Partner Vikas Raj said in the release that he started the fund to “support the next generation of fintech startups in the U.S. who are driving financial resilience for all Americans.”  

For example, ResilienceVC is also an investor in startup Hero, a fintech focused on providing access to real-time contribution-free benefits to hourly wage workers, according to its website.

The Discover Financial Health Fund is “moving quickly,” according to Parks, having already funded two startups since its launch. 

Parks said that beyond direct infusions of capital, Discover is exploring nonmaterial avenues to support the startups it selects and will evaluate their needs on a case-by-case basis. 

Bank of America commits $500M

As Discover commits resources to financial health investment, other financial institutions and their executives are seeing similar opportunities in the venture space. 

Bank of America announced last week that it was pledging $500 million to its woman- and minority-led funds, adding to a $200 million initial investment, according to a Thursday release. The bank has already distributed money to 150 funds, which have invested in more than 1,000 equity-focused companies across the country. 

Meanwhile, Vesey Ventures, a fintech-focused firm founded in 2022 by three former executives at American Express, announced in April that it had secured $78 million for its debut fund. The VC seeks to add value for the founders it funds by issuing the early-stage companies with individualized business development plans.