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 funding round also had participation from Andreessen Horowitz, Remarkable Ventures, and leading banks Huntington National Bank, First Horizon, and Regions. This funding round added to a $4.5 million seed round led by Andreessen Horowitz, bringing the company’s total raised to over $23 million.
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.
ModernFi has 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. And ModernFi’s solutions help banks attract and retain large-value depositors, driving growth and increasing balance sheet stability. Plus, ModernFi streamlines onboarding and operations for banks and their clients, increasing the usability and reach of sweep and reciprocal products.
Since the first funding round, ModernFi has quickly established itself as the country’s only tech-enabled deposit network. Even though 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.
Banks across the country have turned to ModernFi to help manage their funding. The 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. And coupled with increased regulatory scrutiny on liquidity and funding, the need for ModernFi’s software for deposit management has never been greater.
ModernFi was founded in 2022 by Paolo Bertolotti and Adam DeVita – who met as undergraduates at Columbia University. And both focused on deposit and cash management before ModernFi, with Bertolotti completing a PhD at MIT and DeVita working as a Product Manager at Citi.
KEY QUOTES:
“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 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.”
– Paolo Bertolotti, CEO and Cofounder of ModernFi
“The industry needs a next-generation solution for reciprocal deposits that is seamlessly integrated into online banking, built both API-first and cloud-native. 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.”
– Neil Underwood, Co-Founder and General Partner at Canapi
“Huntington is laser focused on delivering innovative products and services that meet the needs of our customers and colleagues. 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.”
– Igor Cerc, Chief Enterprise Strategy Officer for Huntington National Bank and Head of Huntington Ventures
“We are thrilled to partner with ModernFi to bring a next-generation deposit network to market. 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.”
– Tyler Craft, Director of Transformation – Fintech & Emerging Technology at First Horizon Bank
“At this critical time in the banking sector, we’re thrilled to reaffirm our investment in ModernFi. 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.”
– David Haber, General Partner at Andreessen Horowitz
