Banking on Disruption: Why We’re Over the Moon to Invest in Mercury
With a financial services market that’s expected to hit $22.5 trillion in 2021, businesses are drowning in innovative financial tools — API-driven payroll, SaaS bookkeeping, online payments, analytics, and so on.
But, amid a wide range of fintech innovations, one (very large) corner of financial services remains relatively unchanged: the business bank account, which still acts as the starting point and single source of truth for most businesses’ financial operations.
This is especially true for digitally-native tech startups, entrepreneurs, and solopreneurs who yearn for banking services that reflect the pace and needs of their fast-moving online world. Startups are increasingly underserved by incumbent banks and the traditional “relationship banking” that’s been the standard for decades. When expectations and reality are misaligned, there’s opportunity for disruption.
That’s why we’re so excited to be investing in Mercury.
Disruptive banking for tech disruptors
Mercury’s easy-to-use, digitally-connected business banking platform is built specifically for early-stage companies in tech and ecommerce. From easy account set-up to real-time money flows, automated payments/reconciliation, and API integrations with key systems in the finance stack (QuickBooks/Xero, Gusto, Deel/Remote, Pilot, etc.), Mercury is speeding up the way its business customers operate.
As one of Mercury’s customers told us, “[Mercury] Feels like a bank built with tech founders. [The] Interface makes it fun to log into a bank account. The whole banking experience feels like banking should be in 2021.”
By joining startup customers on their journey from day one, Mercury is upstream of most other financial products and services, offering a distinct advantage that puts them in a pole position to develop additional products and services and offer them to customers before the competition. This raises Mercury’s potential from service provider to ecosystem enabler, and that’s a powerful place to sit.
Unsurprisingly, Mercury’s ‘banking disruption to empower disruptors’ approach is paying off. Since its launch in 2019, Mercury has grown quickly, adding 40,000+ business customers from ~200 countries and holding $4b+ in customer deposits.
Experienced founders building a “company of consequence”
We first met Mercury co-founder Immad Akhund over two years ago, just as Mercury launched. From the start, we’ve been inspired by Immad and his co-founders’ far-reaching vision and rapid execution. And as an entrepreneur and multi-startup founder, Immad has strong customer empathy and keen insights into what startups and entrepreneurs need from their banking solutions.
At Sapphire we’ve witnessed the power of fintech disruption through our investments in portfolio companies like AvidXchange, Currencycloud, Current, IEX, OnDeck Capital, Square, Transferwise and Yapily. We’re excited to invest in Mercury’s Series B, alongside friends at A16Z, CRV, and Coatue. This financing is a fantastic milestone for Immad and team, and we’re thrilled to be part of Mercury’s journey to become a company of consequence in a massive market that’s hungry for a modern solution.
Disclaimer: Nothing presented within this article is intended to constitute investment advice, and under no circumstances should any information provided herein be used or considered as an offer to sell or a solicitation of an offer to buy an interest in any investment fund managed by Sapphire Ventures, LLC (“Sapphire”). Information provided reflects Sapphires’ views as of a time, whereby such views are subject to change at any point and Sapphire shall not be obligated to provide notice of any change. While Sapphire has used reasonable efforts to obtain information from reliable sources, we make no representations or warranties as to the accuracy, reliability, or completeness of third-party information presented herein, which is subject to change. Companies mentioned in this article are a representative sample of portfolio companies in which Sapphire has invested in which the author believes such companies fit the objective criteria stated in commentary, which do not reflect all investments made by Sapphire. A complete alphabetical list of Sapphire’s investments made by its direct growth and sports investing strategies is available here. No assumptions should be made that investments listed above were or will be profitable. Due to various risks and uncertainties, actual events, results or the actual experience may differ materially from those reflected or contemplated in these statements. Nothing contained in this article may be relied upon as a guarantee or assurance as to the future success of any particular company. Past performance is not indicative of future results.