Mercury, a fintech firm that provides banking services to startups, has raised $200 million in funding at a $5.2 billion valuation, CNBC has learned exclusively.
That valuation is 49% higher than the San Francisco-based company's previous funding round just 14 months ago, bucking the downturn facing much of the fintech sector.
The Series D round was led by venture firm TCV — backer of other well-known fintech firms, including Revolut and Nubank — and included existing investors Sequoia Capital, Andreessen Horowitz and Coatue, Mercury CEO Immad Akhund told CNBC.
Mercury has emerged in recent years as one of a select group of fintech firms, like the larger payments startups Ramp and Stripe, that have continued to thrive after the collapse of the inflated valuations of the pandemic era.
Mercury, with more than 300,000 customers, including a third of early-stage U.S. startups, has been profitable for the past four years and recently hit $650 million in annualized revenue, Akhund said.
While generative AI has hurt many startups created before the arrival of OpenAI's ChatGPT in late 2022, it has also fueled the formation of new companies — a trend that Mercury, which opens accounts for businesses at their earliest stage, has directly benefited from, according to Akhund.
"We've seen a lot of growth, especially recently, and a lot of that comes down to AI being a big enabler for entrepreneurship," he said. "We're seeing a lot of people doing AI startups, but also non-AI companies where they're using AI to build an app really easily or build products and websites really quickly."
The fundraising comes weeks after Mercury disclosed it received conditional approval from the Office of the Comptroller of the Currency to become a federally regulated bank, part of a wave of fintech and crypto firms seeking entry to the traditional banking system dominated by established lenders.
Building Mercury Bank
The charter, which Akhund says may be ready for final approval in 2027 as Mercury builds its products and internal controls, will enable the firm to keep more revenue for itself.
Once it is a regulated bank, Mercury will also be able to expand its loan offerings, join the Zelle network for instant payments and reduce its reliance on partner banks Column and Choice Financial.
"At the scale Mercury is at, it just makes sense to be directly regulated," Akhund said. "We tend to be much bigger than our sponsor banks. When a bank regulator goes in there, they really want to be regulating us directly."
The move also reflects a broader shift underway in fintech after the collapse of fintech middleman Synapse exposed weaknesses in the partnership model that powered much of the industry's growth over the past decade.
Still, Akhund said Mercury plans to continue working with its partner banks even after obtaining its own charter because some banking services will remain shared across institutions.
Mercury originally gained traction among startups as a more tech-friendly alternative to traditional banks. It later benefited from the fallout of Silicon Valley Bank's collapse in 2023. Now, it aims to use AI to maintain its lead in digital features for founders of startups and small businesses.
Mercury recently launched tools allowing businesses to interact with accounts through AI coding assistants. It also plans to unveil a broader AI interface later this year that will let customers approve payments, send invoices and manage finances with conversational language.
Akhund said he has no plans to sell the company to a bank, as Brex did in January. He said he eventually wants Mercury to go public.
"I really want to build a strong independent brand," he said. "I would like it to be a public company."
Facts Only
Mercury, a fintech firm providing banking services to startups, raised $200 million in Series D funding at a $5.2 billion valuation.
The funding round was led by TCV and included existing investors Sequoia Capital, Andreessen Horowitz, and Coatue.
Mercury’s valuation increased 49% from its previous funding round 14 months ago.
The company serves over 300,000 customers, including a third of early-stage U.S. startups.
Mercury has been profitable for the past four years and recently hit $650 million in annualized revenue.
The company received conditional approval from the Office of the Comptroller of the Currency to become a federally regulated bank.
The banking charter is expected to be finalized by 2027.
Mercury currently partners with banks Column and Choice Financial.
The company plans to expand loan offerings and join the Zelle network once regulated.
Mercury launched AI tools for business account interactions and plans a broader AI interface for financial management.
CEO Immad Akhund stated the company has no plans to sell and aims for an eventual public offering.
Mercury benefited from the fallout of Silicon Valley Bank’s collapse in 2023.
Executive Summary
Mercury, a San Francisco-based fintech firm specializing in banking services for startups, has secured $200 million in Series D funding at a $5.2 billion valuation, a 49% increase from its previous round 14 months ago. The round was led by TCV, with participation from existing investors Sequoia Capital, Andreessen Horowitz, and Coatue. Mercury, which serves over 300,000 customers, including a third of early-stage U.S. startups, has been profitable for four years and recently achieved $650 million in annualized revenue. The company has benefited from the surge in AI-driven entrepreneurship, as founders leverage AI tools to launch businesses more efficiently. Additionally, Mercury has received conditional approval from the Office of the Comptroller of the Currency to become a federally regulated bank, a process expected to conclude by 2027. This charter would allow Mercury to retain more revenue, expand loan offerings, and reduce reliance on partner banks. CEO Immad Akhund emphasized the company’s long-term independence, ruling out acquisition and expressing plans for an eventual public offering.
The funding round and regulatory progress highlight Mercury’s resilience amid broader fintech challenges, including the collapse of Synapse and the downturn in pandemic-era valuations. While Mercury plans to maintain partnerships with existing banks, the shift toward direct regulation reflects a broader industry trend as fintechs seek stability and autonomy. The company’s focus on AI-driven tools for founders, such as conversational finance management, underscores its strategy to differentiate itself in a competitive market.
Full Take
Mercury’s $200 million funding round and regulatory progress present a compelling narrative of resilience in a fintech sector otherwise grappling with valuation corrections and operational failures. The strongest version of this story highlights Mercury’s ability to thrive by catering to a niche—early-stage startups—while leveraging AI-driven tools to enhance user experience. The company’s profitability and revenue growth, coupled with its conditional banking charter, suggest a strategic pivot toward greater autonomy, reducing dependence on partner banks amid industry-wide scrutiny of fintech-bank partnerships.
However, the narrative invites scrutiny of broader patterns. The emphasis on AI as a catalyst for startup formation aligns with a tech-optimistic framing that may overlook structural challenges in entrepreneurship, such as market saturation or the sustainability of AI-dependent business models. The regulatory push, while pragmatic, also reflects a fintech sector increasingly constrained by traditional banking oversight—a shift that could either stabilize the industry or stifle innovation. The CEO’s rejection of acquisition talks, while framing Mercury as an independent brand, may also signal a defensive posture against consolidation trends in fintech.
Root causes here include the tension between fintech’s disruptive origins and its growing integration into regulated financial systems. The assumption that AI-driven entrepreneurship will sustain demand for Mercury’s services rests on untested long-term viability. Second-order implications could include reduced competition if fintechs like Mercury dominate startup banking, or heightened systemic risk if regulatory capture favors incumbent fintechs over traditional banks.
Bridge questions: How might Mercury’s banking charter reshape its risk profile compared to partner-dependent fintechs? What evidence exists that AI-driven startups will maintain demand for Mercury’s services beyond the current hype cycle? Could the push for direct regulation reflect a broader fintech retreat from its original decentralized ethos?
Counterstrike scan: A coordinated influence campaign might amplify Mercury’s success as proof of fintech’s resilience while downplaying systemic risks in the sector. However, the article’s focus on verifiable metrics (revenue, customer base, regulatory milestones) and acknowledgment of industry challenges (Synapse collapse, valuation downturns) does not align with manipulative framing. The narrative appears structurally sound, with no detected patterns of distortion or evasion.
Patterns detected: none
Sentinel — Human
The text exhibits strong journalistic characteristics, using specific quotes and contextual events to build a focused narrative, indicating a high probability of human authorship.