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 Kabbage which only offers a credit line, is not.

Finally, the company must be predominantly focused on small-business financial services (eliminates Paypal, Amazon, Square) delivered primarily digitally (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 closed this month).

NEW: Looking for digital lenders or corporate charge/credit cards?
Check out our latest lists: SMB online lenders (26) | SMB charge/credit cards (15)

 

Leading USA digital small business banks
ranked by our FAB score (Fintech Attention Barometer*)

Company FAB* Score Review Date Founded HQ Funding $M Visits
(May 21)
NOVO 95 22 June ’21 2016 NYC $46 770,000
Mercury 74 22 June ’21 2017 SF $52 650,000
Lili 51 22 June ’21 2018 NYC $80 210,000
Rho 42 22 June ’21 2018 NYC $120 5,200
Oxygen 27 22 June ’21 2018 SF $24 170,000
Hatch 21 22 June ’21 2018 SF $19 130,000
Grasshopper 18 22 June ’21 2016 NYC $131 2,700
NorthOne 16 22 June ’21 2016 NYC $23 81,000
Relay FI 11 22 June ’21 2018 Toronto $4 65,000
Unlaunched
Guava TBD 22 June ’21 2018 NYC INA INA

Source: FintechLabs, Pitchbook, Crunchbase, Craft, SimilarWeb, SEMrush; 24 June 2021
*As nerds do, we are developing a proprietary score measuring the adoption of private digital financial services companies that do not release traditional metrics (# customers, deposits, AUM, etc). We are calling it the FAB score, standing for Fintech Attention Barometer. It’s a work in progress, so expect changes in the formula.

Challenger SMB Banks Currently Active in the United States

1. Novo
FAB Score: 95
– HQ: NYC
– Founded: 2016
– Raised $4.8M (Crunchbase)
– App downloads (last 30 days): 14,000 (Apptopia)
– Website visits: 770,000 (May 2021; SimilarWeb)
– Employees: 51 (Pitchbook)
– Citations: 13 (Crunchbase)
– Twitter: 1,430 followers
– Industry awards: 4 (Novo)
– Integrations: Transferwise, Xero, Slack
– TrustPilot: 4.0 (246 reviews)
– iOS app: 4.5 (404 reviews)

2. Mercury Technologies
FAB Score = 74
– HQ: San Francisco Bay Area
– Founded: 2017
– Raised $52.2M (prior to 2020) (Crunchbase)
– Website visits: 650,000 (May 2021; SimilarWeb)
– Employees: 76 (Pitchbook)
– Citations: 5 (Crunchbase)
– Twitter: 8,200 followers
– Trustpilot: 4.3 (146 reviews)

3. Lili
FAB Score = 51
– HQ: NYC
– Founded: 2018
– Raised $25M (in 2020) (Crunchbase)
– Website visits: 210,000 (May 2021; SimilarWeb)
– Employees: 35 (Pitchbook)
– Citations: 8 (Crunchbase)
– Twitter: 147 followers
– Trustpilot: 2.8 (3 reviews)

Image

4. Rho
FAB Score = 42
– HQ: NYC
– Founded: 2018
– Raised $120M ($100M in 2021) (Crunchbase)
– Website visits (April 2021): 5,200 (SEMrush)
– Employees: 35 (Pitchbook)
– Articles (past 2 years): 16 (Crunchbase)
– Twitter: 684 followers
– Trustpilot: No reviews

5. Oxygen
FAB Score = 27
– HQ: San Francisco Bay Area
– Founded: 2018
– Raised $24M ($17M in 2020) (Crunchbase)
– Website visits: 170,000 (May 2021; SimilarWeb)
– Employees: 30 (Pitchbook)
– Citations: 10 (Crunchbase)
– Twitter: 1,530 followers
– Trustpilot: 2.0 (14 reviews)

6. Hatch
FAB Score = 21
– HQ: SF
– Founded: 2018
– Raised $19M (most recently, $14M in Feb 2020) (Crunchbase)
– Website visits: 130,000 (SEMrush)
– Employees: 48 (Pitchbook)
– Citations: 3 (Google News)
– Twitter: 685 followers
– TrustPilot: no reviews

7. Grasshopper Bank
FAB Score = 18
– HQ: NYC
– Founded: 2016
– Raised $131M prior to 2020 (Crunchbase)
– Website visits: 2,700 (May 2021; SEMrush)
– Employees: 250 (Owler)
– Citations: 8 (Crunchbase)
– Twitter: 788 followers

8. NorthOne
FAB Score: 16
– HQ: NYC/Toronto
– Founded: 2016
– Raised $23.3M (Crunchbase)
– Website visits: 81,000 (May 2021; SimilarWeb)
– Employees: 74 (Pitchbook)
– Citations: 10 (Crunchbase)
– Twitter: 2,460 followers
– TrustPilot: 3.3 (48 reviews)
– iOS: 4.3 (213 reviews)

9. Relay FI
FAB Score: 11
– HQ: Toronto
– Founded: 2018
– Partner bank: Evolve
– Raised $4.4M (Crunchbase)
– Website visits: 51,000 (May 2021; SimilarWeb)
– Employees: 16 (Pitchbook)
– Citations: 0 (Crunchbase)
– Twitter: 410 followers
– TrustPilot: Not enough data (1 review)

10. NEW: Guava
FAB Score: TBD (launching soon)
– HQ: NYC
– Founded 2018
– Raised: Unknown (Crunchbase)
– Website visits: Unknown
– Employees: 2 (Pitchbook)

Challengers Closed to New Accounts

12. Azlo (owned by BBVA; closed 31 March 2021)
FAB Score: 15
– HQ: San Francisco Bay Area
– Founded: 2017
– Raised: NA
– Website visits: 130,000 (May 2021; SimilarWeb)
– Employees: Closed
– Citations: 35
– Twitter: 1,670 followers
– Trustpilot: 3.8 (394 reviews)
– iOS: 4.3 (249)

13. Solid (was Wise)*
FAB Score: 12
– HQ: SF
– Founded: 2018
– Raised $17.8 (Crunchbase)
– Website visits: 32,000 (May 2021, SimilarWeb)
– Employees: 43 (Pitchbook)
– Citations: 4 (Crunchbase)
*Note: Pivoted to BaaS. Don’t appear to be offering accounts directly.

14. Joust (acquired by ZenBusiness, 30 July 2020; currently referring customers to Radius Bank)
FAB Score: 3
– Target: Freelancers
– HQ: Austin, TX
– Founded: 2017
– Raised: $11M (Crunchbase)
– Website visits: Unknown
– Employees: 18 (Pitchbook)
– Citations: 5 (Crunchbase)
– Twitter followers: 448
– Trustpilot: NA
– iOS: 4.1 (28 reviews)

15. Seed (Acquired by Cross River Bank currently closed to new customers)
FAB Score: 1
– HQ: San Francisco Bay Area
– Founded: 2014
– Raised $5.2M (2015) (Crunchbase)
– App downloads (last 30 days): 425 (Apptopia)
– Website visits: 210 (May 2021; SEMrush)
– Number of employees: 12 (Pitchbook)
– Citations: 4 (Crunchbase)
– Twitter: 810 followers

Addendum: Other SMB/SME challenger banks around the world (not a definitive list):

UK

Germany

Australia

France

Rest of world