Source: CB Insights

The first pure-play online bank Security First Network Bank (SFNB) launched in 1995, just a year after Amazon.com. But unlike ecommerce, digital-only banking was slow to catch on. The legacy players held onto their market share by providing digital services that were “good enough” to retain customers loath to switch banks.

But that began changing 3 or 4 years ago, first in the UK, then elsewhere as well-financed digital players started making inroads with consumers, first Monzo, then Revolut, Starling, Nubank, Chime, just to name a few. But we still haven’t seen a breakout small business bank. The digital small biz lenders are grabbing share, Kabbage, Square, Paypal, Amazon, Brex, etc. But there is not yet a place where small businesses flock to get deposit, payment, and financing needs met in a single interface.

So who are the best business banks? Let’s start with a definition. I don’t believe they need to be regulated as a bank as long as they facilitate the big three products under one UI:

  • deposits (e.g., cash-holding account)
  • debit or charge cards
  • credit lines

Under that definition, PayPal is a business bank as is Square and Amazon. But Brex, which only offers a corporate card and Kabbage which only offers a credit line, are not.

Finally, the company must be predominantly focused on small business financial services (eliminates Paypal, Amazon and Square), and deliver it through primarily digital means (rules out Wells Fargo, BofA, and the majority of traditional banks). We are also including divisions of traditional FIs, if they operate under a separate autonomous brand, such as BBVA’s Azlo (which is scheduled to close its doors later this year).

Leading USA digital small business banks
ranked by our FAB score (Fintech Attention Barometer, see note 1) 

  1. Grasshopper Bank
    FAB Score = 71
    – HQ: NYC
    – Founded: 2016
    – Raised $131.5M (Crunchbase)
    – Website visitors (Dec 2020): 9,700 (SimilarWeb)
    – Employees: 250 (Owler)
    – Articles (past 2 years): 7 (Crunchbase)
    – Twitter: 770 followers

  2. Azlo (owned by BBVA; in the process of closing down)
    FAB Score: 63
    – HQ: San Francisco Bay Area
    – Founded: 2017
    – Raised: NA
    – Website visitors (Dec 2020): 570k (SimilarWeb)
    – Employees: 120 (Owler)
    – 35 articles in past 2 years (4 in ’20, 26 in ’19, 5 in ’18)
    – Twitter: 1,720 followers
    – Trustpilot: 3.5 (127 reviews)
    – iOS: 4.3 (249)

  3. Mercury
    FAB Score = 60
    – HQ: San Francisco Bay Area
    – Founded: 2017
    – Raised $52.2M (prior to 2020) (Crunchbase)
    – Website visitors (Dec 2020): 280,000 (SimilarWeb)
    – Employees: 74 (Craft)
    – Articles (past 2 years): 4
    – Twitter: 6,900 followers

  4. Lili
    FAB Score = 42
    – HQ: NYC
    – Founded: 2018
    – Raised $25M (in 2020) (Crunchbase)
    – Website visitors (Dec 2020): 91,000 (SimilarWeb)
    – Employees: 200 (Craft)
    – Articles (past 2 years): 6 (Crunchbase)
    – Twitter: 82 followers

  5. NorthOne
    FAB Score: 35
    – HQ: NYC/Toronto
    – Founded: 2016
    – Raised $23.3M (Crunchbase)
    – Website visitors (Dec 2020): 85,000 (SimilarWeb)
    – Employees: 40 (Craft)
    – Articles (past 2 years): 13 (1 in ’20, 10 in ’19, 2 in ’18)
    – Twitter: 2,401 followers
    – TrustPilot: NA
    – iOS: 4.3 (213 reviews)

  6. Oxygen
    FAB Score = 30
    – HQ: San Francisco Bay Area
    – Founded: 2018
    – Raised $24M ($17M in 2020) (Crunchbase)
    – Website visitors (Dec 2020): 13,000 (SimilarWeb)
    – Employees: 45 (Craft)
    – Articles (past 2 years): 16 (Crunchbase)
    – Twitter: 1,604 followers

    Image

  7. Rho
    FAB Score = 28
    – HQ: NYC
    – Founded: 2018
    – Raised $19.9M ($15M in 2020) (Crunchbase)
    – Website visitors (Dec 2020): 27,000 (SimilarWeb)
    – Employees: 16 (Craft)
    – Articles (past 2 years): 14 (Crunchbase)
    – Twitter: 622 followers

  8. Novo
    FAB Score: 28
    – HQ: NYC
    – Founded: 2016
    – Raised $4.8M (Crunchbase)
    – App downloads (last 30 days): 12K (Apptopia)
    – Website visitors (Dec 2020): 190k (SimilarWeb)
    – Employees: 45 (Craft)
    – Articles (past 2 years): 8 (2 ’20, 6 ’19, 1 ’18)
    – Twitter: 1,318 followers
    – Industry awards: 4 (Novo)
    – Integrations: Transferwise, Xero, Slack
    – TrustPilot: 2.8 (3 reviews)
    – iOS app: 4.5 (404 reviews)

  9. Wise
    FAB Score = 26
    – HQ: San Francisco Bay Area
    – Founded: 2018
    – Raised $17.7M (in 2020) (Crunchbase)
    – Website visitors (Dec 2020): 7,400 (SimilarWeb)
    – Employees: 50 (Craft)
    – Articles (past 2 years): 3 (Crunchbase)
    – Twitter: 215 followers

  10. Joust (acquired by ZenBusiness)
    FAB Score: 12
    – Target: Freelancers
    – HQ: Austin, TX
    – Founded: 2017
    – Raised: $11M (Crunchbase)
    – Website visitors (Dec 2020): minimal (SimilarWeb)
    – Employees: 15 (Owler)
    – 12 articles in past 2 years (5 in ’20, 7 in ’19) (Google News)
    – Twitter followers: 457
    – Trustpilot: NA
    – iOS: 4.1 (28 reviews)

  11. Seed – Acquired by Cross River Bank (currently closed to new customers)
    FAB Score: 3
    – HQ: San Francisco Bay Area
    – Founded: 2014
    – Raised $5.2M (2015) (Crunchbase)
    – App downloads (last 30 days): 200
    – Website visitors (monthly): 5.9k (SimilarWeb)
    – Articles (past 2 years): 0
    – Twitter: 820 followers

Notes:
1. Because we are number nerds, we are developing a proprietary score that measures the adoption of a new digital financial services company. We are calling it the FAB score, standing for Fintech Attention Barometer. It’s a work in progress, so expect changes in the formula.

2. Others around the world (not a definitive list):

UK

Germany

Australia

Rest of world

  • Holvi – Finland, acquired by BBVA March 2016
  • Qonto – France
  • Tochka – Russia