ModernFi raises from Andreessen Horowitz as banks embrace software to source deposits and manage balance sheet size

February 14, 2023 | Company Announcement

As we have discussed in past updates, wholesale funding is a powerful tool for banks to strategically and tactically manage their balance sheets. However, current options, which include deposit brokers, deposit networks, listing services, and the Federal Home Loan Banks, tend to be inconvenient, expensive, or both. Funding often has to be sourced over the phone and settlement can take weeks.

On the other hand, banks with excess deposits quickly run into balance sheet constraints. Undeployed funds hurt returns and negatively impact performance, condition, and capital ratios. Banks are sometimes even forced to turn away new clients or business lines when their balance sheets cannot support any more deposit growth.

We created ModernFi and its deposit marketplace to help banks of all sizes, whether they need funding or need to offload deposits. By providing an outlet for excess deposits, we help banks manage balance sheet size and earn potential revenue. By providing deposits on demand, we help banks source liquidity and fund asset origination. With a modern tech stack built on a foundation of compliance and regulatory adherence, our marketplace has quickly been embraced by banks of various sizes. ModernFi currently works with banks ranging in size from $500 million to $100 billion in assets.

The ModernFi team is proud to announce that we have raised from Andreessen Horowitz to accelerate the marketplace’s rapid adoption. Executives and founders from AWS, Coinbase, Q2, and BlackRock also participated in the round.

By bringing technology and transparency to a historically antiquated and opaque market, we hope to help our bank partners operate more efficiently and better serve their communities. The banks we work with are pillars in their local neighborhoods, extending credit to folks that want to buy a house or get a car, as well as providing a safe place for people to keep their life savings.

You can read more about our work and raise from TechCrunch here and the American Bankers Association here.

The team and I are eternally grateful for all the support from our bank partners, advisors, and investors. We look forward to continuing to support our bank partners on their mission to uplift their communities and improve the financial health of millions of Americans.

Best,

Paolo and the ModernFi Team

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Disclosures:

All information contained herein is for informational purposes and should not be construed as investment advice. It does not constitute an offer, solicitation or recommendation to purchase any security, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Past performance does not guarantee future results. The information contained herein is for institutional use only.

ModernFi Advisers LLC (ModernFi) is not a bank, nor does it offer bank deposits and its services are not guaranteed or insured by the FDIC; ModernFi allocates funds to banks that are FDIC members. ModernFi is an investment adviser registered with the United States Securities and Exchange Commission (SEC). For more information regarding the firm, please see its Form ADV on file with the SEC through the Investment Adviser Public Disclosure website. Registration with the SEC does not imply a particular level of skill or training.

Certain information contained herein has been obtained from third party sources and such information has not been independently verified by ModernFi. No representation, warranty, or undertaking, expressed or implied, is given to the accuracy or completeness of such information by ModernFi or any other person. While such sources are believed to be reliable, ModernFi does not assume any responsibility for the accuracy or completeness of such information. ModernFi does not undertake any obligation to update the information contained herein as of any future date.

Certain information contained herein constitutes “forward-looking statements,” which can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue,” or “believe,” or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events, results or actual performance may differ materially from those reflected or contemplated in such forward-looking statements. Nothing contained herein may be relied upon as a guarantee, promise, assurance or a representation as to the future.

Except where otherwise indicated, the information contained in this communication is based on matters as they exist as of the date of preparation of such material and not as of the date of distribution or any future date. Recipients should not rely on this material in making any future investment decision.