Turning Startup Banking into Software
Immad Akhund, CEO of Mercury, on the business models of fintechs vs. banks
This is the wedge Mercury used to turn startup banking from a relationship business into a software product. SVB had deep venture ties and built a franchise around investor networks, but that also meant access often flowed through warm introductions and service economics that favored larger, better connected startups. Mercury won by letting a small company open an account online, move money, issue cards, and start operating without waiting for a VC to vouch for them.
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SVB was built around the venture ecosystem for decades, and by 2013 it said it served about half of U.S. venture backed tech and life science companies. That concentration made it powerful inside the network, but also meant startup banking felt like a specialized club rather than a self serve product.
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Mercury broadened the market below classic venture banking. Beyond small startups, it expanded into bootstrapped businesses, e-commerce sellers, consultants, and investors. That matters because these customers still need checking, wires, cards, and treasury tools, but they are too small or too operationally messy for a relationship bank to prioritize.
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The business model follows the product design. Mercury makes most of its money from deposit revenue share with partner banks, plus cards, wires, FX, and venture debt, so it can profit from many smaller accounts at scale. By 2024 it had reached $20B in deposits and $500M in annualized revenue on that model.
The category keeps moving toward startup finance as an always on internet product. The winners will be the platforms that can onboard a company in minutes, keep deposits safe across multiple bank partners, and then layer on treasury, cards, bill pay, and founder tools as that company grows from its first $1M raise into a much larger operating business.