ModernFi announced today that it has closed an $18.7 million Series A funding round 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 Series A 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 seed 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 banks thrive in an increasingly competitive banking landscape, and attract and retain clients that might otherwise go to the largest banking institutions or leave the banking 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,” said Paolo Bertolotti, CEO and Cofounder of ModernFi. “Faced with fundamental shifts in the behavior of deposits, institutions benefit 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 can grow, retain, and manage their deposit base by sweeping funds, sourcing deposits, and providing extended insurance to depositors through program banks. ModernFi’s solutions help banks attract and retain large-value depositors, driving growth and increasing balance sheet stability. Unlike alternatives, ModernFi streamlines onboarding and operations for banks 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 only 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 banks, 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.”
