The Trump administration’s hardline stance against immigration has drawn the ire of VCs.
Due to an abrupt delay in the implementation of the International Entrepreneur Rule, which would allow foreign-born entrepreneurs to build companies in the United States on a temporary visa, the National Venture Capital Association (NVCA) has filed suit against the Trump admin.
With over 300 members, according to the NVCA’s website, nearly every major VC (and then some) is represented in the lawsuit.
But in a world where VCs are continually funding disruptive startups, we wondered: What progress were members of the NVCA making in funding startups that make immigration easier?
Investors Who Fund Immigration Startups
To find out how many NVCA-affiliated VCs funded immigration startups, we cross-checked a list of investors who have invested in immigration startups with those VCs who are a part of the NVCA.
The results were paltry. Out of 344 VC firms pulled from the NVCA website, only eight had made investments into immigration-focused startups. The list includes 500 Startups, CIT GAP Funds, ff Venture Capital, First Round Capital, Globespan Capital Partners, Intel Capital, Pelion Venture Partners, and RRE Ventures.
Collectively, this small cohort of VCs invested a little over $52.3 million into seven immigration startups across 28 known deals, the vast majority of which went into seed-stage funding.
The largest recipient of funding belongs to Boom Financial. Founded in 2008 and backed by RRE Ventures, the financial services company made it easier and cheaper to send money globally. According to its Crunchbase description, the company believes that “immigrants are being taken advantage of by traditional cash service providers in the remittance, check cashing. and payday loan worlds.”
However, even with a total of $33.7 million in funding, the company was unable to sustain itself and shut down in late 2014. Boom’s founder, Bill Barhydt, has since moved on to creating a digital wallet for Bitcoin called Abra.
But financial services are not the only angle investors have funded in regards to immigration.
Getting Through The Paperwork
The immigration process is often awash in confusing paperwork. One startup that is aiming to change that for employers is Bridge US.
Founded by Romish Badani and Forrest Blount, the SF-based startup aims to “make immigration effortless,” according to its Crunchbase profile. It does so through a project management platform for HR teams at major companies such as Coca-Cola Enterprises, Allegiant, American Family Insurance, and others.
Its model has attracted $800,000 in seed funding from the likes of 500 Startups and Ulu Ventures.
“Bridge has assisted with over 40,000 immigration matters” leading to an estimated “$425 million in wages and immigrant-created jobs,” CEO Romish Badani told Crunchbase News.
And although the U.S. sees over 6 million immigration applications a year, a number of significant hurdles need to be overcome for startups to successfully disrupt the market.
“For those pursuing consumer-facing immigration services, it can be very challenging to affordably acquire customers at scale,” Badani told Crunchbase News in an email. “Your customer lifetime value may be less than $500 for consumer-facing processes… companies might spend that amount or more to drive enough traffic to their site.”
This is not to mention the cost of ensuring an immigration business model “is compliant with legal ethics rules, including regulations against sharing of legal fees and other attorney professional conduct rules.”
But it appears that Bridge US, with its focus on immigration offerings for employers, has found the sweet spot. Badani claims the company is profitable, negating the need to raise additional funds. The company also hasn’t found that the Trump administration has reduced interest in its services, even though President Trump signed an executive order aimed at limiting foreign workers.
“Many companies have pursued immigration avenues (e.g., a Green Card for a key employee) earlier than they ordinarily would to hedge against potential legislative changes,” Badani noted. “That, along with companies taking a harder look at their immigration function and processes, has been a net benefit to our business.”
Still, the number of deals and amount invested in immigration startups is likely far short of what is needed to address the market. For now, it’s a battle VCs don’t feel like they can solve.
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