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 JPMorgan Chase, 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.
Paolo and the ModernFi Team