Nymbus, a startup that partners with banks to migrate its legacy stack and launch NeoBank to attract new customers, today announced it raised $70 million in a Series D round led by Insight Partners . Bank Funds Company and Mendon Venture Partners also participated, as did Nimbus clients ConnectOne Bank and PeoplesBank.
According to CEO Jeffrey Kendall, the new capital will be invested in enhancing Jacksonville-based Nimbus’ various products and services, particularly its core transaction processing engine and platform for commercial banking.
“When banks and credit unions need a robust technology stack to support operations, the market is limited to options that are often more than 30 years old,” Kendall told TechCrunch in an email interview. ” “In 2015, Nymbus launched its cloud-based core banking platform for financial institutions to provide a robust option to replace legacy technology and reduce technical debt. The solution has evolved over time to streamline operations, provide new avenues for growth and enhance the overall customer experience.
Co-founded by Alex Lopatine and Scott Kiloh in 2015, Nimbus emerged at a time when millennial and Gen Z banking customers began looking for online alternatives to traditional banks — fueled by a desire to find better rates. According to a survey by GOBankingRates, nearly 30% of Americans aged 25-34 now use online banks, while 21% of Americans of any age have adopted them.
Banks are, unsurprisingly, feeling the pressure to adapt to a changing world by modernizing and digitizing both their operations and products. But most of them are not equipped to do so. According to a 2021 McKinsey study, only 30% of banks that have successfully implemented digital transformation report are implementing their digital strategy, and most fall short of their stated objectives – whether due to technical debt, locked down IT architecture or there should be an unbreakable gap between them. Business and IT Dept.
Nimbus aims to boost success rates with a cloud-based banking solution that provides traditional banks with API access, event-driven alerting and features, robotic process automation and more. Banks and credit unions can integrate the functions they need to expand their digital capabilities, enhance their back-office processes or introduce new products.
There are several companies that offer this type of “banking-as-a-service (BaaS)”, such as Novopayments, a Miami-based startup that focuses primarily on offering its API platform to customers in the Latin American market. is concentrated. There’s also Bud, which recently raised $80 million to expand its AI-based Open Banking platform, which is often used by banks for lending instruments.
In fact BaaS has become the industry norm. A 2022 Finastra poll of US financial institutions and banks found that 86% agree that customers are already expecting BaaS, while nearly half (46%) have improved or deployed a BaaS solution in the past year. According to one estimate, the BaaS market was valued at around $20 billion in 2021 and could grow by more than 16% from 2022 to 2030.
But Nimbus stands out for its ability to deliver a “fully managed digital bank,” says Kendall, which includes a “unified data stream” that can be used for data analysis, decision making, and strategic planning. Furthermore, the modular nature of the platform can reduce costs without sacrificing “operational excellence,” in Kendall’s words – making it cost-effective.
“Nimbus’ product suite, which includes core processing, loan origination, account opening and digital channels, coupled with operational resources, empowers financial institutions of all sizes to tap into new market segments and drive growth,” They said. “Ease of maintenance and speed to market are important to CIOs and this is nimbus gives a solution.”
It certainly has a lot to promise. And when Nimbus was asked, it declined to say how many customers it is currently serving and its projected recurring revenue, which is a predictor of success (albeit not a foolproof one). Still, despite his reluctance to lift the wraps on the company’s operations, Kendall stressed that Nimbus — which has about 200 full-time employees and contractors — is well-positioned to weather adversity in the coming months.
“General economic uncertainty and a slowdown in tech funding have made it more difficult to secure resources for expansion and innovation,” he added. “But we have solid solutions in our portfolio to support the growing needs of banks and credit unions to modernize and meet their customers – in the digital realm. We believe that as the importance of bank modernization increases, will increasingly realize there will be a continued demand for our services.”
