Financial Software Startup nCino Banks $29M in Series B Round
[Updated 2/24/15, 4:19 pm. See below] Cloud banking software company nCino has raised $29 million in a Series B round of financing as the startup charts a growth course that could take its offering into bigger banks and international markets.
Insight Venture Partners led the round, which also included investments from existing investors Wellington Management; John Mack, the former Morgan Stanley chairman and CEO; and Gene Ludwig, the founder and CEO of Promontory Financial Group. Salesforce (NYSE: CRM) is also an investor and technology partner to the Wilmington, NC-based company. NCino has raised more than $50 million to date.
NCino’s software was made by a bank for banks, the company says. Live Oak bank, which is also based in Wilmington, needed software to improve its performance in lending. Finding no commercially available software that met its needs, the bank’s executives decided to develop the software in-house. That software that became nCino’s product and has been in use by Live Oak since 2008. Three years ago, the bank spun nCino out as a separate company. (The company’s name is derived from the Spanish word “encino,” which means “live oak.”)
Roughly half of nCino’s more than 100 employees came from the banking industry. Pierre Naude, nCino’s CEO, was a former executive at financial services company S1 Corporation prior to its 2012 acquisition by payment systems company ACI Worldwide (NASDAQ: ACIW).
NCino’s software ties together the disparate transactional systems in banks, such as the software used by bank tellers, ATMs, and in online banking. In addition to giving banks tools to manage these systems, the company says nCino’s software also offers insights and analysis, which can help streamline operations. NCino says its software increases loan volume, decreases the loan closing time, and improves staff efficiency.
“What nCino becomes is the brains behind the bank—the system that sits on top of all the stuff, extracts the data, and becomes the single system to operate the bank for every employee,” Jonathan Rowe, nCino’s marketing director said last fall in a presentation during the CED Tech Venture Conference.
[Paragraphs updated to include comment from Naude.] At first, nCino targeted community banks and credit unions. But the company is now aiming to bring its offering to larger banks. NCino now counts as customers more than 80 banks and credit unions with assets ranging from $150 million to $200 billion.
“We are currently engaged in positive discussions with a number of large institutions, and see this market as a promising area of growth and opportunity for nCino,” Naude said in an e-mail message.
The company is also planning on expanding overseas, though Naude says it is too early to discuss international expansion in detail. But nCino is growing. In 2014, Naude says nCino generated $6 million in revenue, up from $2 million in 2013. Banks pay for the software by buying licenses for each user. At the Tech Venture Conference, Rowe said that licenses were about $150 per user, per month.
Naude says that the funding will help support expansion within the United States and overseas. The money will also support software development, including more mobile features, and up to 75 new hires in product development, product management, and customer service.