Sila collects $13 million to offer a unique API for the development of financial products and services – TechCrunch

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If the announced Monday that it has raised $13 million in Series A funding for its banking and payments platform that gives software teams tools to build the next generation of financial products and services.

Revolution Ventures led the round and was joined by existing investors Madrona Venture Group, Oregon Venture Fund and Mucker Capital, as well as Wise co-founder Taavet Hinrikus. The funding brings the total investment to date for Portland, Oregon-based Sila to $20 million.

The company was founded in 2018 by Shamir Karkal, Angela Angelovska, Isaac Hines, and Alex Lipton to simplify digital payments and storage in a regulatory-compliant way and powered by blockchain technology. CEO Karkal has a long history in the fintech space, co-founding Simple, an app that unifies various accounts into one accessible bank card, in 2009. It was acquired by BBVA in 2014 for $117 million and closed earlier this year.

Karkal told TechCrunch that the idea for Sila was born out of frustration while starting another bank. He saw a need for financial application development, but was hampered by a banking system “still stuck in the 20th century”. He believed consumers expected a different level of service, which is why many are flocking to fintechs.

However, whenever a company tried to connect existing banking systems, fintechs and cryptocurrency innovators, as they were built and scaled, always encountered technology and compliance issues, a said Karkal.

“The problem with working with banks is figuring out how to integrate with their mainframe,” he added. “In the process, you end up having to be compliance experts as well just to be able to do that.”

While it took Karkal three years to set up banking processes for other companies, it took Sila 18 months. Its banking APIs allow developers to create their own digital wallets, replacing the need to integrate with existing financial institutions. Sila also has partnerships with fintech platforms including Plaid, Alloy, Lithic and Arcus to move money, and is backed by Evolve Bank and Trust.

Sila can now have customers up and running in six to eight weeks. And unlike competitors who focus almost exclusively on e-commerce, most of Sila’s customers make regulated payments in the areas of fintech, insurtech, commercial real estate and cryptocurrency which tend to be more complex from a compliance perspective, Karkal said.

Since the company launched its platform, business has grown steadily and took off in the second half of 2020. The company raised a $7.7 million seed round earlier in the year. Over the past 12 months, Sila has increased revenue 10x and customer end users have grown over 500% in the past seven months.

Sila will use the new funding to increase headcount, target additional partners, and expand product functionality, including its Ethereum MainNet stablecoin issuance and interoperability between FedWire and the Nacha Automated Clearing House network.

“There’s a massive surge of fintechs emerging in the United States, and we’ve barely scratched the surface,” Karkal said. “Places like India, Africa and Latin America could accelerate at the same time because they are mostly starting from scratch. We’re here to “Arm the Rebels” and help these innovators build apps to give all end users a much better financial experience. »

As part of the investment, Clara Sieg, partner at Revolution Ventures, joins the company’s board of directors. She told TechCrunch that she met the company’s co-founders through the Portland ecosystem.

Revolution tends to view fintech startups from a consumer perspective. Recognizing that the problem of building infrastructure meant dealing with banks, the company explained how to find a company building the pipes to solve it, she said.

In the fintech landscape, she sees Dwolla as a competitor to Sila. Last week, the company raised $21 million to continue developing its API that enables businesses to create and facilitate fast payments, particularly with a focus on ACH. However, it’s really about recruiting customers, and that competitive landscape is pretty thin, Sieg added.

“Sila is building an easy way for people to program money and have a regulatory eye on things,” Sieg said. “When Shamir was building Simple, he could see how difficult it was for incumbents to provide the tools developers need to integrate financial services, and that’s why we have confidence in his ability to win.”

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