Immad Akhund, CEO and co-founder of startup Mercury;
Provided by: Mercury Technologies
Mercury, a fintech company that provides banking services to startups, has raised $200 million in funding at a valuation of $5.2 billion, CNBC has learned exclusively.
The valuation is 49% higher than the San Francisco-based company’s previous funding round just 14 months ago, overcoming the downturn faced by much of the fintech sector.
The Series D round was led by venture firm TCV, a backer of other well-known fintech companies such as Revolut and Revolut. Nubank Mercury CEO Imad Akhand told CNBC that existing investors include Sequoia Capital, Andreessen Horowitz and Courtue.
Mercury has emerged in recent years as one of a select group of fintech companies, including payments giants Lamp and Stripe, that continue to grow after their soaring pandemic-era valuations collapsed.
Mercury has more than 300,000 customers, including a third of early-stage startups, and has been profitable for the past four years, reaching annual revenue of $650 million in the third quarter, Akhand said.
Generative AI has hurt many startups that were founded before the arrival of OpenAI’s ChatGPT in late 2022, but it has also encouraged the creation of new companies. This trend has directly benefited Mercury, which opens corporate accounts early on, Akhand said.
“We’ve seen a lot of growth, especially recently, and a lot of that comes down to AI being a huge enabler of entrepreneurship,” he said. “We see a lot of people working on AI startups, but also non-AI companies using AI to build apps very easily, or products and websites very quickly.”
The funding comes weeks after Mercury revealed it had received conditional approval from the Office of the Comptroller of the Currency to become a federally regulated bank, part of a wave of fintech and crypto companies seeking entry into the traditional banking system dominated by incumbent lenders.
build mercury bank
Acundo said the charter could be ready for final approval in 2027 as Mercury builds out its products and internal controls, which would allow the company to keep more revenue for itself.
Becoming a regulated bank will also allow Mercury to expand its loan offerings, join the Zelle network for instant payments, and reduce its reliance on partner banks Column and Choice Financial.
“Given Mercury’s size, it makes sense for it to be regulated directly,” Acundo said. “We tend to be much larger than our sponsor banks. When bank regulators get in there, they actually want to regulate us directly.”
The move also reflects broader changes underway in the fintech industry, after the collapse of fintech intermediary Synapse exposed weaknesses in the partnership model that underpinned much of the industry’s growth over the past decade.
Still, Acundo said Mercury plans to continue working with partner banks even after receiving its own license, as some banking services will remain shared between institutions.
Mercury originally gained traction among startups as a more technology-friendly alternative to traditional banks. The company then benefited from the fallout from the Silicon Valley bank failure in 2023. The company now aims to leverage AI to maintain its lead in digital capabilities for startups and small business founders.
Mercury recently announced a tool that allows businesses to interact with their accounts through an AI agent. We also plan to unveil a broader AI interface later this year that will allow customers to authorize payments, send invoices, and manage their finances in conversational language.
Acundo said there are no plans to sell the company to a bank, as Brex did in January. He said he would eventually like to take Mercury public.
“I want to build a really strong independent brand,” he said. “I want it to become a listed company.”
