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Insights
Company Announcement
ModernFi Raises $18.7M to Power Deposit Growth at Community and Regional Banks
Led by Canapi Ventures, round accelerates mission to bring end-to-end deposit management to financial institutions of all sizes, helping them thrive in a fast-changing banking environment
January 23, 2024
The ModernFi team is pleased to announce today that it has raised an additional $18.7 million in funding to bring its tech-forward platform to community and regional banks to help them grow, retain, and manage their deposits. Led by Canapi Ventures, the round also had participation from Andreessen Horowitz, Remarkable Ventures, and leading banks Huntington National Bank, First Horizon, and Regions. This round adds to a $4.5 million round led by Andreessen Horowitz, bringing the company's total raised to over $23 million to date.
Faced with higher interest rates and stress in the sector, banks have been seeking new, innovative options that can drive deposits. ModernFi helps financial institutions (FIs) thrive in an increasingly competitive landscape, and attract and retain clients that might otherwise go to the largest banking institutions or leave the sector entirely.
Community and regional banks form the foundation of the American economy, providing an outsized amount of credit and banking services to critical industries and areas that might otherwise be overlooked. Faced with fundamental shifts in the behavior of deposits, institutions have benefitted from modern tools to manage and grow their funding. ModernFi has been privileged to help institutions of all sizes protect their deposit base, and the team looks forward to continuing its support of the sector.
ModernFi operates a deposit network through which banks and credit unions can grow, retain, and manage their deposit base by sweeping funds, sourcing deposits, and providing extended insurance to depositors through program institutions. ModernFi’s solutions help FIs attract and retain large-value depositors, driving growth and increasing balance sheet stability. Unlike alternatives, ModernFi streamlines onboarding and operations for FIs and their clients, increasing the usability and reach of sweep and reciprocal products.
“The industry needs a next-generation solution for reciprocal deposits that is seamlessly integrated into online banking, built both API-first and cloud-native,” said Neil Underwood, Co-Founder and General Partner at Canapi. “ModernFi has built exactly that, at the exact right time and place. Canapi’s strong bank network and deep fintech experience will help accelerate significant deposit flows through the platform.”
Since its first raise, ModernFi has quickly established itself as the country’s leading tech-enabled deposit network. While existing networks rely on manual processes that have limited the adoption and use of network products, ModernFi’s network is built on a modern tech stack to eliminate the friction for depositors and remove the operational burden for FIs, unlocking the full potential of sweep and reciprocal products.
“Huntington is laser focused on delivering innovative products and services that meet the needs of our customers and colleagues,” said Igor Cerc, Chief Enterprise Strategy Officer for Huntington National Bank and Head of Huntington Ventures. “ModernFi's deposit network delivers critical features and capabilities around deposit management for the industry. ModernFi’s functionality should expand digital capabilities for the banking sector and offers a robust, modern service with the potential to further differentiate how our Wealth Management customers can manage their money.”
"We are thrilled to partner with ModernFi to bring a next-generation deposit network to market," said Tyler Craft, Director of Transformation - Fintech & Emerging Technology at First Horizon Bank. "Deposit management is a key priority for the banking sector right now. ModernFi's technology to streamline onboarding and operations for depositors and banks provides an innovative additional way for our industry to serve clients."
Faced with a rapidly evolving deposit landscape, financial institutions across the country have turned to ModernFi to help manage their funding. Elevated interest rates and the advancement of technology including digital banking and real-time money movement have fundamentally changed the speed and stability of deposits. Coupled with increased regulatory scrutiny on liquidity and funding, the need for ModernFi’s software for deposit management has never been greater.
"At this critical time in the banking sector, we're thrilled to reaffirm our investment in ModernFi," said David Haber, General Partner at Andreessen Horowitz. "In the face of unprecedented deposit outflows and extraordinary banking events, ModernFi's deposit network delivers critical stability and control over deposit management. With their strategic position and track record, we're confident ModernFi will further catalyze growth and provide crucial support to American banks."
The ModernFi team is eternally grateful to our team, investors, and FI partners for joining us on this journey. We have much more to build. Thank you and onwards 🤝
Best,
The ModernFi Team
Disclosures:
All information contained herein is for informational purposes and should not be construed as investment advice. It does not constitute an offer, solicitation or recommendation to purchase any security, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Past performance does not guarantee future results. The information contained herein is for institutional use only.
ModernFi Advisers LLC (ModernFi) is not a bank, nor does it offer bank deposits and its services are not guaranteed or insured by the FDIC; ModernFi allocates funds to banks that are FDIC members.
Certain information contained herein has been obtained from third party sources and such information has not been independently verified by ModernFi. No representation, warranty, or undertaking, expressed or implied, is given to the accuracy or completeness of such information by ModernFi or any other person. While such sources are believed to be reliable, ModernFi does not assume any responsibility for the accuracy or completeness of such information. ModernFi does not undertake any obligation to update the information contained herein as of any future date.
Certain information contained herein constitutes “forward-looking statements,” which can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue,” or “believe,” or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events, results or actual performance may differ materially from those reflected or contemplated in such forward-looking statements. Nothing contained herein may be relied upon as a guarantee, promise, assurance or a representation as to the future.
Except where otherwise indicated, the information contained in this communication is based on matters as they exist as of the date of preparation of such material and not as of the date of distribution or any future date. Recipients should not rely on this material in making any future investment decision.