Digital banking technology company Mantl announced today that it has received $40 million in Series B funding. Mantl, which provides software that allows small community banks and credit unions to build their own online platforms, has raised a total of $60.7 million so far. The round was led by CapitalG, an independent growth fund of Alphabet (Google’s parent company). CapitalG’s previous investments in the fintech space include Stripe, Robin Hood and Credit Karma. Besides CapitalG, other Series B sponsors are D1 Capital Partners, BoxGroup, and existing sponsors Point72 Ventures, Clocktower Technology Ventures and OldSlip Grou.
Breach of traditional bank
Mantl was founded in 2016 to provide a simple, user-friendly platform to integrate with major banking systems and give customers access to a wide range of options via mobile tools. Since 95 percent of U.S. banks are community banks and credit unions, Mantl wanted to develop a tool to help these small institutions compete with the big banks. Mantl acknowledged that many traditional banks have the resources to create user-friendly digital platforms, but are often reluctant to upgrade due to their risk appetite. With this in mind, the company has developed a number of tools to help small institutions meet this need.
The Mantl platform adds value to small financial institutions because it is easy to use. With little knowledge, small financial institutions can use Mantl to customize the look, feel and messaging of their online platform with a no-code editor. Just as Shopify makes it easy for small business owners to launch a fully customized online store with little experience, Mantl performs a similar function for small banks.
Growth in opening of online accounts
Although Mantle initially planned to create his own financial institution to challenge traditional banks, he soon realized that there was a much greater need to fill vacancies. Since many traditional banks work with a software language that is over 60 years old, Mantl wanted to develop a newer software that would meet today’s requirements. They found that the main area where small banks can compete with large institutions is in opening online accounts. According to Mantl, by leveraging its platform, the financial institution can provide tools that allow customers to open an account anywhere, anytime and on any device in less than three minutes. Their flagship account opening software was developed to meet a real need in the industry. Four years ago, the company estimated that less than 20 percent of all banks in the United States offered online account opening. Today, this figure is still below 50%.
The capital raised will be used to develop new products and hire additional employees. A key objective will be to expand the existing account opening platform to meet the needs of small businesses. The company hopes to update its account-opening software later this year to allow small businesses to open accounts as well. While many community banks are building relationships with small businesses during COWID-19 through the wage protection program and other state programs, Mantle has seen a demand from institutions for products that allow them to turn short-term relationships into long-term ones.
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