rewrite this title Mercury Raises $300 Million, Boosts Valuation to $3.5 Billion – Finovate

Mercury raised $300 million in Series C funding, bringing its total investment to $452 million and boosting its valuation to $3.5 billion.

The round, which was led by Sequoia Capital, includes both primary (growth) and secondary (stakeholder liquidity) funding.

Mercury differentiates itself by offering integrated digital banking solutions for startups and SMBs, positioning it as a direct competitor to Brex and Ramp.

Business banking fintech Mercury unveiled today that it closed a $300 million funding round, rocketing the company’s total raised to $452 million. The Series C investment round was led by new investor Sequoia Capital and saw participation from other new investors Spark Capital and Marathon, as well as existing investors Coatue, CRV, and Andreessen Horowitz.

The round includes both primary and secondary funding. This means that not only will the company have funds to use for growth, but it will allow early stakeholders the opportunity to cash out part of their investments. The investment also boosts Mercury’s valuation. The California-based company is now valued at $3.5 billion, which is more than double its 2021 valuation of $1.6 billion.

Mercury was founded in 2017 and has since focused on serving small businesses and investors. In 2022, the company launched its corporate card. Two years later, Mercury expanded once again to launch financial tools to help companies pay bills, send invoices, automate accounting, and manage employee expenses.

Today, the company helps more than 200K businesses and entrepreneurs access banking tools, credit cards, and software they need to manage their financial workflows. Among Mercury’s customers are startups like Linear, Phantom, and ElevenLabs, as well as venture capital firms and e-commerce companies like Cocolab and Bogey Bros.

When Silicon Valley Bank (SVB) collapsed in 2023, Mercury saw $2 billion in client deposits from entrepreneurs seeking an alternative banking option. Today, the digital bank retains 95% of those funds. In fact, Mercury’s handling of the SVB collapse was what gained it the attention of Sequoia, the lead new investor of today’s round.

“Mercury began with the vision that banking should do more than safely hold money – it should bring all the ways people and businesses use money into a single product that feels extraordinary to use,” said company CEO and Co-Founder Immad Akhund.

Along with its funding announcement, Mercury also unveiled key financial growth milestones, including:

Ten consecutive quarters of profitability based on both EBITDA and GAAP net-income

$500 million in revenue in 2024

40% growth in customers year-over-year

$156 billion in annual transaction volume, up 64% year-over-year

Last year, Mercury introduced Mercury Personal, a digital bank account that offers a personal bank account for users who want self-serve banking and a high-quality product experience to optimize their personal finances. Mercury Personal is slated to launch later this year.

“Mercury is a disruptive company with a bold vision for the future of banking,” said Sequoia Capital Partner Sonya Huang. “It has been synonymous with banking for startups, but Mercury is built for nearly every business and is a real competitor to legacy banks. With its track record of profitability, innovation, operational excellence, and clear vision for what banking can become, I believe that Mercury has a chance to be a generational company at the intersection of financial services and software.”

Mercury sits in the same arena as competitors Brex and Ramp. However, Brex and Ramp have carved out niches through corporate credit cards and expense management solutions aimed at high-growth startups and larger enterprises, while Mercury differentiates itself by delivering more of a comprehensive digital banking solution with integrated financial management software tailored to early-stage startups and entrepreneurs.

Photo by Andy Hermawan on Unsplash

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