nymbus, a startup that works with banks to migrate their legacy stack and create neobanks to attract new customers, today announced it has raised $70 million in a Series D round led by Insight Partners has. Banc Funds Company and Mendon Venture Partners also attended, as did Nymbus clients ConnectOne Bank and PeoplesBank.
According to CEO Jeffrey Kendall, the new capital will be invested in scaling Jacksonville-based Nymbus’ various products and services, specifically its core transaction processing engine and commercial banking platform.
“While banks and credit unions need a robust technology stack to support operations, the market is limited to options that are often over 30 years old,” Kendall said in an email interview with TechCrunch. “In 2015, Nymbus launched its cloud-based core banking platform for financial institutions to provide a robust option for replacing outdated technology and reducing technical debt. The solution has grown over time to streamline operations, open up new avenues for growth and improve the overall customer experience.”
Founded in 2015 by Alex Lopatine and Scott Killoh, Nymbus emerged at a time when millennials and Gen Z bankers were beginning to look for online alternatives to traditional banks, driven in part by a desire to find better interest rates. according to a Opinion poll According to GOBankingRates, nearly 30% of Americans ages 25-34 now use online banking, while 21% of Americans of all ages have adopted it.
Not surprisingly, banks are feeling the pressure to adapt to a changing world by modernizing and digitizing both their operations and their products. But most of them are not equipped for it. According to a 2021 McKinsey report learnOnly 30% of banks that have undergone a digital transformation report that they have successfully executed their digital strategy, and the majority are falling short of their stated goals – whether due to technical debt, siled IT architectures or an unbridgeable gap between them Business and IT departments.
Nymbus aims to increase success rates with a cloud-based banking solution that offers traditional banking features such as API access, event-driven notifications and features, robotic process automation, and more. Banks and credit unions can integrate the capabilities they need to expand their digital capabilities, improve their back-office processes, or launch new products.
There are a number of companies that offer this type of “Banking-as-a-Service (BaaS)”, such as NovoPayment, a Miami-based startup that is primarily focused on bringing its API platform to customers in Latin America to offer to the market. Also, Bud recently raised $80 million to expand its AI-powered open banking platform, which is widely used by banks to provide lending tools.
In fact, BaaS has become the industry standard. A Finastra 2022 Opinion poll of US financial institutions and banks said that 86% agree customers are already expecting BaaS, while nearly half (46%) have upgraded or adopted a BaaS solution in the past year. According to one treasureIn 2021, the BaaS market was valued at around $20 billion and could grow by over 16% from 2022 to 2030.
However, according to Kendall, Nymbus excels in its ability to provide a “fully managed digital bank” that encompasses a “unified stream of data” that can be used for data analysis, decision making and strategic planning. The modular nature of the platform can also reduce costs without sacrificing “operational excellence” (in Kendall’s words) – making it cost-effective.
“Nymbus’ product suite, which includes core processing, lending, account opening and digital channels, coupled with operational resources, enables financial institutions of all sizes to enter new market segments and drive growth,” he said. “Ease of maintenance and speed to market are critical for the CIO, and that is what the nymbus solution.”
That’s certainly a lot to promise. And when asked, Nymbus refused to say how many clients the company currently serves and what its projected recurring revenue will be, which tends to be an indicator of success (though not a foolproof one). Despite his reluctance to lift the curtain on the company’s operations, Kendall assured Nymbus – which currently employs about 200 full-time employees and contractors – is well positioned to weather the headwinds in the coming months.
“General economic uncertainty and the slowdown in technology funding have made securing resources for expansion and innovation more difficult,” he said. “But we have solid solutions in our portfolio to support the growing need of banks and credit unions to modernize their customers and meet them where they are – in digital. We believe demand for our services will continue to be high as banks increasingly recognize the importance of modernizing.”
