Launching in April (2022), Winden is the fourth SMB challenger bank announced this year.

At FintechLabs, we’ve been focused on small business (SMB/SME) financial services for the past 18 months or so. And during that time, there had been no change in the total number (12) of U.S.-based SMB challenger banks. Several new banks launched, but an equal number closed.

That is, until this month when we learned of 4 new efforts. One is from Zions is a bit of an outlier (we covered here). Two are strikingly similar, Baseline and Norphin, which are both creating bank accounts for U.S. landlords. And the fourth, Winden, is targeting the Brex crowd, business owners that identify as digital entrepreneurs.

Only Winden and Baseline are currently open to the public. Zions has a private beta running and Nophine is amassing a waitlist.

Why are their four new entrants already in 2022?

  • The macro business environment is more positive. Now that the pandemic appears to be relatively under control, fintech founders are more likely to create new businesses focusing on the SMB opportunity
  • Banking-as-a-Service (and fintech-as-a-service) providers have proliferated in the past 5 years, making it much easier to start a neo/challenger bank.
  • Other opportunities are saturated: There is a reason why the SMB market has been overlooked for decades, it’s a difficult market to gain venture scale in. However, the success of Brex, Ramp et al has entrepreneurs looking at the space with fresh eyes. While it’s difficult to profit from the deposit side of the business, business lending can be highly lucrative. And most, if not all, challenger banks have lending on their short-term roadmap.

The SMB Challenger Bank Class of 2022 (so far)

Status: Accepting account applications
Founded: 2020
Funding: $7.9M
Website visitors: 4,900 (March 2022)

Status: Waitlist
Founded: 2021
Funding: $2.5M
Website visitors: 5,000 (March 2022)

Status: Accepting account applications
Founded: 2021
Funding: $5.3M
Website visitors: 110,000 (March 2022)

Status: Waitlist (with private beta)
HQ: Salt Lake City, Utah
Founded: 2022
Funding: NA (division of Zions)
Website visitors: 18,000 (March 2022)