Synapse Banks $33M to Grow its Automated Back Office for Fintechs
Prominent venture capital firm Andreessen Horowitz (a16z) has jumped in to back San Francisco startup Synapse, which has assembled a plug-in infrastructure to process financial transactions for banks as well as fintech startups.
Andreessen led a Series B fundraising round that yielded $33 million for Synapse, which handles payments from checking accounts and credit cards, manages bank deposits, and supports cryptocurrency wallets, among other services. Financial institutions tap into the separate products through application programming interfaces (APIs.)
In September, Synapse announced the close of a Series A funding round that raised $17 million from investors including Trinity Ventures and Core Innovation Capital. Both of those firms also participated in the Series B round.
In a blog post about the new influx of capital, Synapse CEO and co-founder Sankaet Pathak said the company’s mission is to expand global access to financial services for more customers, “regardless of their net worth.’’ He also sees the company as a catalyst for innovation in financial technology.
“The idea being, if we can make it easier for everyone to build and scale financial products, more developers will build them, more use cases will be serviced, so more people will have access to best-in-class financial products,’’ Pathak says in the blog post. Synapse plans on making new hires to meet those goals.
Late last year, the company said it had processed more than $10 billion in transactions.
With its new money, Synapse plans to expand its offerings to “deliver a full stack financial infrastructure product to every developer, big or small,’’ Pathak says.
In a product roadmap posted in March, Pathak says Synapse will begin a global expansion this year by offering some of its services in Europe and Canada.
Angela Strange, a general partner at a16z, has joined Synapse’s board of directors, as has Michael Hoffmeyer, director at the Crews Center for Entrepreneurship at the University of Memphis.
In her own blog post, Strange compares the current hurdles for starting fintech companies to the challenges of creating an online business before the advent of plug-in elements from providers such as Amazon Web Services (AWS).
“Financial services today is an industry still very much in the pre-AWS age. Getting a fintech company started is hard—requiring multiple partnerships [with existing banks], deep financial services knowledge, and requiring established connections and capital,” Strange writes. “In most cases, it still takes [an] average of 18 months to 2 years to get a new financial services company going.”
Strange says Synapse is easing some of those barriers so that companies outside the financial services sector have a shot at becoming fintech companies as well.
“Synapse’s clients have launched consumer banking services, business banking services, new cards for different uses, and many other financial products that might have taken months or more—or might not have made it to market otherwise,” Strange writes.
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