Synctera, a banking-as-a-service startup, has raised another $15 million in its expansion into Canada.
NAventures, the corporate venture arm of the National Bank of Canada, led the funding, bringing Synctera’s total amount raised since its inception in June 2020 to $60 million. Private equity firm The Banc Funds and sponsor bank partners Veritex Community Bank, Midland States Bank and Emigrant Bank also participated in the round.
In June 2021, Synctera increased $33 million in one Series A funding round led by Fin VC.
As part of the latest funding announcement, Synctera is also announcing that it is partnering with the National Bank of Canada to help companies launch fintech apps and embedded banking products in the country.
Basically, Synctera has built a platform designed to bring fintech companies and sponsor banks together.
“Our goal is to do this in a way that makes it easy, fast and flexible to scale functions and engagement on the fintech side, while also being highly intentional, automated where it makes sense and most importantly in a way dialed in on compliance and risk, that gives banks the confidence to work with us and fintechs of all sizes,” said Peter Hazlehurst, co-founder and CEO of Synctera.
Until now, the company only operated in the US. But after a “number” of US and Canadian fintech reached out to inquire about using its service in other markets, Synctera decided to expand its offerings.
“Many of our Canadian team members saw the solutions we helped launch in the US and inquired about similar offerings in Canada – none of which existed,” said co-founder and CTO Kris Hansen. “Some of the larger brands have also reached out to us to ask about the potential for a solution in Canada and there are a few customers who see the appeal of one API surface to address two markets – all of these factors have helped us our decision to expand to Canada.”
The executives declined to comment on Synctera’s valuation or provide hard revenue numbers, but Hazlehurst told businesskinda.com that the company’s fourth-quarter revenue was up 20x year-over-year and that all usage metrics and revenue were “up 30% month-over-month.” continue growing”. per month in terms of, for example, payment volume.”
Synctera currently partners with 14 fintechs, including Wayapay and Float. It has another 20+ in deployment planned for launch in March and April, according to Hazlehurst.
Examples of companies that have integrated banking into their product include Players Health, TipHaus, and Solvent, a fintech working to build affordable financial services to help formerly incarcerated individuals become more resilient.
Synctera makes money by charging the fintechs it works with set-up and access fees and by taking a portion of the transaction fees, interest earned, and exchange with its marketplace from banks.
In 2023, Synctera plans to add support for new credit, lending and other banking use cases – and expand into new geographies and customer segments. Currently, the remote-first company has 110 employees — 50 of them in Canada — and is looking for more people to help it grow in Canada, Hansen noted.
“We’re focused on putting this capital to work, for example, setting up operations and working through all of the regulatory and compliance frameworks, which is our playbook in the US,” Hazlehurst said.
Joshuah Lebacq, director of venture capital at NAventures, National Bank of Canada, noted that the growing interest in bank-fintech collaboration has led to strong demand for technology solutions that make it easier for banks and distributors to collaborate.
“Synctera’s Banking-as-a-Service platform achieves this while allowing each party to focus on what they do best,” he said. “We believe the multibank structure will become the category winner in banking-as-a-service as it solves many existing BaaS bottlenecks and addresses emerging regulatory concerns.”
The fact that Synctera doesn’t require core banking integration was also appealing, Lebacq added, in addition to what he described as “the full transparency the platform offers, enabling near real-time audibility and compliance monitoring.”
“In addition, Synctera’s expansion in multiple countries is also significant,” he told businesskinda.com. “I can envision a future where global brands leverage the Synctera platform to simultaneously launch banking products in multiple markets with multiple partner banks, all through a single API – such an achievement would completely revolutionize digital financial services.”
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