Title: ModernFi Secures $18.7 Million in Series A Funding to Provide Deposit Management Solutions to Banks

In response to recent banking collapses, ModernFi has emerged as a key player in providing deposit management solutions to community and regional banks. The company recently announced a successful Series A funding round, securing $18.7 million in investment.

ModernFi, founded in 2022 by Paolo Bertolotti and Adam DeVita, raised $4.5 million in a seed round just before the collapse of Silicon Valley Bank (SVB). The subsequent challenges faced by banks like SVB, Signature, and First Republic prompted industry professionals to seek better solutions. Recognizing this need, Canapi Ventures, which had been involved in discussions about these challenges, took the lead in the Series A funding round for ModernFi.

Joining Canapi Ventures in the funding round were prominent investors such as Andreessen Horowitz and Remarkable Ventures, as well as a group of banks including Huntington National Bank, First Horizon, and Regions. In total, ModernFi has raised over $23 million in venture capital.

The year 2022 and 2023 were described by ModernFi CEO Paolo Bertolotti as "unique and pretty substantial," due to rising interest rates leading to an aggressive deposit runoff. Bertolotti highlighted the impact on small and mid-sized banks, emphasizing the importance of deposit growth and retention management for these institutions. Luckily, ModernFi was well-positioned to assist, enabling deposit networks and institutions to weather the storm and continue their growth trajectory.

ModernFi generates revenue by earning basis points based on deposits within its network. Although Bertolotti declined to reveal specific financial details beyond stating that 2023 was a successful year, he did mention that the company doubled its headcount between the seed and Series A funding rounds. Furthermore, the number of supported institutions has grown significantly.

Looking ahead, ModernFi plans to expand its initiatives, focusing on enhancing its analytics suite and working on features such as asset liability management and account-level deposit analytics. The ultimate goal is to support the entire lifecycle and workflow for bank CFOs. This ambitious undertaking is met with great enthusiasm by the ModernFi team.

With this latest injection of funding, ModernFi is well-equipped to continue providing innovative deposit management solutions to community and regional banks, offering a stabilizing force in an evolving banking landscape.