BankSimple raises $10 million and offers hope for banking innovation
Step by step this cynical blogger is becoming a convert. Raising $10M is a big deal. It seems the model is to provide a quality front end with a bank and FDIC guarantees behind.
I remember back in the 90’s when internet was new and one of the models we conjectured was banks becoming ‘manufacturers’ sitting the in the background offerring banking services wholesale. Part of that model requires Banks to buy in.
BankSimple have absorbed that model it seems and found willing providers. key will be the financial arrangement between the players. It is easy to take on the costs for the front end (BankSimple) but the bank must accept a fee structure that accepts they are relatively dormant in the back end.
More power to BankSimple and lets see where this goes.
The latest round of financing was led by current investor IA Ventures and joined by existing investors and Shasta Ventures. It follows an initial round of $3.1 million raised in September last year.
In a blog post, BankSimple founder Joshua Reich, says: “This financing allows us to shift gears from building BankSimple to launching BankSimple. Our business has many moving parts and this capital allows us to scale our engineering, operations, and customer service organisations in preparation for launch.”