Banking appears to be in the midst of a renaissance right now, with an onslaught of neobanks and other fintech startups aiming to disrupt the status quo and dethrone the incumbents. There’s popular mobile banking app Current, teen-focused Step, and Lili, a mobile banking app for freelancers, to name a few — and many have been making headlines for raising big funding rounds and hitting even bigger valuations of late.
Extend is offering something a little different, though. Instead of taking on legacy banks, the startup is helping them, providing them with a digital payment infrastructure so they can offer virtual cards to their users and better compete with this horde of newcomers. And now, Extend has raised a fresh $40 million in Series B funding to expand its services.
Founded in 2017 by former American Express executives Andrew Jamison and Guillaume Bouvard, along with tech veteran Danny Morrow, Extend integrates directly with major banks like Mastercard and Visa. This means they can offer the same cutting edge features the competition does, without forcing users to switch banks. Most recently, the startup partnered with American Express to give the millions of small and medium-sized businesses that use the bank access to virtual cards through their existing cards.
“As industry veterans, we saw first-hand how issuers were struggling to overcome the complexity of banking infrastructure,” Jamison said in a statement, adding that banks “standing on legacy systems” will likely be left behind in this new world of fintech. “By streamlining access to key components of the payment stack, we’ve been able to deliver solutions that are universally accessible. But what excites us most, is the creativity that such accessibility breeds — not only are we helping banks reach the new status quo, we are seeing innovators develop their own solutions with the flexibility of our platform.”
So far, Extend has more than 2,000 business customers using its platform, and that number is reportedly growing 30 percent month-over-month. The startup has also garnered the financial backing of some impressive industry leaders, including fintech-focused VC firm Point72 Ventures, Wells Fargo and Pacific Western Bank. March Capital led this most recent funding round.
“We were excited by the approach Extend has taken to building this digital infrastructure that enables modernization for banks across the industry,” March Capital co-founder and managing partner Sumant Mandal said in a statement. “The market is inundated with neobanks offering new banking solutions but there’s little payment innovation coming out of established institutions. Extend is laying the foundation for the next generation of growth for major banks.”
