SMB Fintech Stack (Source: Canapi)

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 their market share by providing digital services deemed “good enough” to retain customers loath to switch banks.

But that began changing about 6 or 7 years ago, first in the UK, then elsewhere as well-financed digital players started making inroads with consumers. There was Monzo, Revolut, Starling, Nubank, Chime, just to name a few. But we still haven’t seen a breakout small business bank, partly because of the love/hate relationship business owners have with big banks.

In the adjacent SMB lending space (see our Top 30 Digital Lender’s list), top brands such as Kabbage (now American Express), Square, Paypal, Amazon, Brex, and others have grabbed significant share. But there is not yet a place where small businesses flock to get deposit, payment, and financing needs met in a single interface. Brex was probably the closest, but it recently abandoned the SMB market to focus on larger enterprises.

So who are the best digital challenger business banks? Let’s start with our definition.

  1. Centered around deposit and debit/charge card services (eliminates Kabbage and most SMB lenders)
  2. Predominantly focused on small-business financial services (eliminates Paypal, Amazon, Block)
  3. Primarily digitally delivered (rules out Wells Fargo, BofA, and the majority of traditional banks*)
  4. Founded since 1999.

*Note: We also include divisions of traditional FIs if they operate under a separate autonomous brand, such as Zions ZiFi.

For the latest table, check our Challenger Bank table. 

Challenger of the Month

Mercury Bank

HQ: SF  |  Founded: 2017  |  Raised $136M (including $120M in 2021)  |  Valuation: $1.7 billion | Website visits: 1.3 million/month  | Employees: 383  |  Article citations: 14  |  Linkedin: 13,700 followers | Trustpilot: 4.0 (450 reviews) | iOS app: 4.7 (760 reviews)

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NEW: Looking for digital banks, lenders, payment providers, insurance or digital accounting for small businesses? Check out our latest lists: SMB online lenders (33) | SMB challenger banks (12) | SMB insurers (15) | SMB charge cards/expense management (16) | Billpay & invoicing (16)| Payment processors (7) | Subscription processors (7) | SMB digital accounting/bookkeeping (21)

The FAB Score Ranking (Fintech Attention Barometer) is a proxy for the size of a private fintech company.

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

Rank Company FAB Reviewed Founded HQ Funding ($M)** Visits (Sep ’22)
1 Mercury 347 16 Nov ’22 2017 SF $152 1,400,000
2 NOVO 237 16 Nov ’22 2016 NYC $136 900,000
3 Found 187 16 Nov ’22 2019 SF $75 730,000
Ad*** Relay 59 16 Nov ’22 2018 Toronto $19 240,000
4 Oxygen 101 16 Nov ’22 2018 SF $25 470,000
5 Lili 72 16 Nov ’22 2018 NYC $80 190,000
6 NorthOne 70 16 Nov ’22 2016 NYC $90 160,000
7 Nearside (Hatch)**** 60 16 Nov ’22 2018 SF $73 130,000
8 Relay 59 16 Nov ’22 2018 Toronto $19 240,000
9 Grasshopper 38 16 Nov ’22 2016 NYC $162 15,000
10 Viably 21 16 Nov ’22 2021 NC $21 21,000
11 Vergo 20 16 Nov ’22 2021 NYC $4.1 62,000
12 Baselane 18 16 Nov ’22 2020 NYC $7.9 49,000
13 ZilBank 10 16 Nov ’22 2021 Dallas $0 22,000
14 Winden 16 16 Nov ’22 2021 LA $5.3 52,000
15 Guava 4 16 Nov ’22 2018 NYC $2.4 0
Unlaunched
Zifi (Zions Bank) 7 16 Nov ’22 2022 Utah $0 0
Nophin 7 16 Nov ’22 2021 NYC $3 0

Source: FintechLabs, Pitchbook, Crunchbase, SimilarWeb, SEMrush; 18 Oct 2022

* The FAB score, Fintech Attention Barometer, is a proxy for the overall size of a private company since they typically do not release traditional metrics (# customers, deposits, AUM, etc). The score is based on VC funding, website traffic, mobile downloads, and the number of employees. It’s a work in progress, so expect changes in the formula.
**Funding is the amount invested into the company as either equity or debt.
***Our business model depends on revenue from referrals. So anytime you see a referral link in the URL, we potentially earn a fee upon establishing a new funded account (thanks!).
****Acquired by Plastiq in Nov 22 for a reported $130M. Currently not accepting new accounts (update 23 Nov 2022)

Challenger SMB Banks Currently Active in the United States

1. Mercury Technologies
FAB Score = 347 (+20 since October)
– HQ: San Francisco Bay Area
– Founded: 2017
– Raised $152M (Crunchbase) including $120M in 2021
– Valuation: $1.7B (based on July 2021 round)
– Website visits: 1.4 million (Sep 2022; SimilarWeb)
– Employees: 383 (Pitchbook)
– Articles: 14 (Crunchbase)
– Linkedin: 15,300 followers (750 employees)
– iOS app: 4.8 (872 reviews)
– Trustpilot: 3.9 (486 reviews)

2. Novo
FAB Score: 237 (down 20)
– HQ: NYC
– Founded: 2016
– Raised $136M including $131M in 2021 (Crunchbase)
– App downloads (last 30 days): 55,000 (Apptopia)
– Website visits: 900,000 (Sep 2022; SimilarWeb)
– Employees: 300 (Pitchbook)
– Articles: 95 (Crunchbase)
– Linkedin: 13,600 followers (275 employees)
– Industry awards: 4 (Novo)
– Integrations: Wise, Xero, Slack
– TrustPilot: 3.9 (1,580 reviews)
– iOS app: 4.8 (12,100 reviews)

3. Found 
FAB Score = 187 (+25)
– HQ: San Francisco Bay Area
– Founded: 2019
– BaaS partner: LendingClubBank
– Raised $75.2M including $60M in Feb 2022; $12.75M in 2021 (Crunchbase)
– Website visits: 730,000 (SimilarWeb, Sep 2022)
– Employees: 78 (Pitchbook)
– Linkedin: 2,300 followers (79 employees)
– Trustpilot: 2.1 (13 reviews)
– iOS: 4.8 (5,300 reviews)

4. Oxygen
FAB Score = 101 (unchanged)
– HQ: San Francisco Bay Area
– Founded: 2018
– Raised $25M including $1M in 2021 (Crunchbase)
– Website visits: 370,000 (SimilarWeb, Sep 2022)
– Employees: 96 (Pitchbook)
– Articles: 21 (Crunchbase)
– Linkedin: 5,200 followers (94 employees)
– Trustpilot: 3.8 (190 reviews)
– iOS app: 4.8 (22,300 reviews)

 

5. Lili
FAB Score = 72 (unchanged)
– HQ: NYC
– Founded: 2018
– Raised $80M including $55M in 2021 (Crunchbase)
– Website visits: 190,000 (SimilarWeb, Sep 2022)
– Employees: 70 (Pitchbook)
– Articles: 17 (Crunchbase)
– Linkedin: 9,000 followers (95 employees)
– Tiktok: 240,000 followers; 600,000 likes
– Trustpilot: 4.7 (1,260 reviews)

 

6. NorthOne
FAB Score: 70 (down 2)
– HQ: NYC/Toronto
– Founded: 2016
– Raised $90M including $67M in Oct 2022 (Crunchbase)
– Website visits: 160,000 (SimilarWeb, Sep 2022)
– Employees: 80 (Pitchbook)
– Articles: 27 (Crunchbase)
– Linkedin: 7,700 followers (79 employees)
– TrustPilot: 2.8 (118 reviews)
– iOS app: 4.8 (2,600 reviews)

 

 

7. Nearside (formerly Hatch)*
(Update 23 Nov 2022) Plastiq acquired Nearside in Nov 22 for a reported $130M.
*Currently not accepting new accounts.
FAB Score = 60 (down 9)
– HQ: SF
– Founded: 2018
– Raised $73M including $58M in 2021 (Crunchbase)
– Website visits: 130,000 (SimilarWeb, Sep 2022)
– Employees: 104 (Pitchbook)
– Articles: 5 (Crunchbase)
– Linkedin: 1,400 followers (67 employees)
– TrustPilot: no reviews
– iOS: 4.3 (170 reviews)

 

8. Relay
FAB Score: 59 (down 6)
– HQ: Toronto
– Founded: 2018
– Partner bank: Evolve
– Raised $19.4M including $15M in 2021 (Crunchbase)
– Website visits: 240,000 (SimilarWeb, Sep 2022)
– Employees: 87 (Pitchbook)
– Linkedin: 2,900 followers (88 employees)
– TrustPilot: 4.4 (611 reviews)
– iOS: 4.5 (224 reviews)

9. Grasshopper Bank
FAB Score = 38 (+1)
– HQ: NYC
– Founded: 2016
– Raised $162M including $30M Aug 2022 (Crunchbase)
– Website visits: 15,000 (SimilarWeb, Sep 2022)
– Employees: 101 (Pitchbook)
– Articles: 13 (Crunchbase)
– Linkedin: 14,500 followers (105 employees)
– Trustpilot: No reviews

10. Viably
FAB Score: 21 (+3)
– HQ: Charlotte, NC
– Founded: 2016
– Raised $21M in 2022 (Crunchbase)
– Website visits: 21,000 (SimilarWeb, Sep 2022)
– Employees: 33 (Pitchbook)
– Articles: 1 (Crunchbase)
– Linkedin: 700 followers (31 employees)
– iOS app: NA

11.Vergo
FAB Score = 20 (+10)
– HQ: NYC
– Founded: 2021
– Raised $4.2M including $4.1M in June 2022 (Crunchbase)
– Website visits: 62,000 (SimilarWeb, Sep 2022)
– Employees: 20 (Linkedin)
– Citations: 2 (Crunchbase)
– Linkedin: 570 followers (20 employees)
– Trustpilot: NA

12. Baselane
FAB Score: 18 (+1)
– HQ: NYC
– Founded: 2020
– Raised: $7.9M in 2021 (Crunchbase)
– Employees: 26 (Linkedin)
– Articles: 5 (Crunchbase)
– Website visits: 49,000 (SimilarWeb, Sep 2022)
– Linkedin: 1,100 followers (25 employees)

13. Zilbank
FAB Score = 10 (down 1)
– HQ: Dallas, TX
– Founded: 2021
– Raised: INA (Crunchbase)
– Employees: 2 (Linkedin)
– Articles: 5 (Crunchbase)
– Website visits: 22,000 (SimilarWeb, Sep 2022)
– Linkedin: 72 followers (3 employees)

14. Winden
FAB Score = 16 (down 3)
– HQ: LA
– Founded: 2021
– Raised: $5.3M (Crunchbase)
– Employees: 21 (Linkedin)
– Articles: 2 (Crunchbase)
– Website visits: 52,000 (SimilarWeb, Sep 2022)
– Linkedin: 2,600 followers (21 employees)

 

15. Guava (NEW)
Fab Score = 4
– HQ: NYC
– Founded 2018
– Banking services provider: Piermont Bank
– Raised: $2.4M in July 2022 (Crunchbase)
– Website visits (Sep 2022): 3,900 (SEMrush)
– Employees: 10 (Pitchbook)
– Linkedin: 1,000 followers (12 employees)

 

Unlaunched

Zifi (Zions Bank)
– HQ: Salt Lake City, UT
– Founded: 2022
– Raised: NA (unit of Zions Bank)
– Website visits: 7,500 (SEMrush, June 2022)
– Linkedin: 20 followers (2 employees)

 

 

 

Challengers Closed to New Accounts

Solid (was Wise) >> pivoted to Fintech as a Service in 2021
FAB Score: 386
– HQ: SF
– Founded: 2018
– Raised $18M prior to 2021 (Crunchbase)
– Website visits: 1.9 million (Mar 2022; SEMrush)
– Employees: 126 (Pitchbook)
– Articles: 4 (Crunchbase)
– Linkedin: 2,020 followers (56 employees)

 

14. Joust (acquired by ZenBusiness, 30 July 2020; currently referring customers to Radius Bank)
– 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)
– 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