Alphabet's CapitalG Invests $40M in Fintech Mantl

Community Banks and the Digital Frontier

Community banks and credit unions are fundamentally designed to serve as central pillars within their respective communities. However, maintaining technological parity with larger financial institutions, possessing substantial resources, presents a significant hurdle. This challenge is further compounded by the emergence of numerous digital banks in recent years, intensifying the competitive landscape.

Introducing MANTL: A Modern Solution

MANTL, a burgeoning startup, offers a technological solution designed to streamline the digital account opening process for community banks and credit unions. This facilitates increased deposit acquisition and, ultimately, enhanced profitability. Established in 2016 and headquartered in New York, Mantl has been likened to “the Shopify of account opening” by industry observers.

Given the substantial number of community banks and credit unions operating nationwide, Mantl’s potential market reach is considerable. The fintech experienced a 2.1x revenue increase in 2020, driven by a surge in demand for digital services from consumers following the onset of the COVID-19 pandemic.

Series B Funding and Future Growth

The company has recently announced the successful completion of a $40 million Series B funding round, spearheaded by Alphabet’s independent growth fund, CapitalG. This investment will fuel further expansion. To date, Mantl has secured a total of $60.7 million in funding since its inception.

Previous funding rounds include a $19 million raise last July, following a remarkable 705% growth in deposit volume during April of the same year. While the startup has chosen not to disclose specific revenue figures, its trajectory is clearly upward.

From Challenger Bank to Enabling Technology

Initially, Mantl aimed to establish its own challenger bank. However, during this process, the founders recognized the prevalence of legacy technology within the existing banking infrastructure. Approximately 96% of the 10,000 banks and credit unions in the U.S. rely on third-party vendors like Fiserv and Jack Henry, some of which utilize technology that is, according to Mantl co-founder and CEO Nathaniel Harley, “decades old.”

This outdated infrastructure hinders the ability of many financial institutions, particularly community banks and credit unions, to effectively compete online and limits the digital banking options available to consumers.

A Pivotal Shift in Focus

Consequently, the company adjusted its strategy, recognizing the crucial role community banks and credit unions play in maintaining competition and financial equity within the United States.

“Mantl is fundamentally an enterprise software company dedicated to assisting traditional financial institutions in modernizing and expanding their reach,” Harley explained to TechCrunch. “Our core mission is to broaden access to financial services by addressing the limitations imposed by legacy infrastructure, which has historically restricted access to digital banking.”

Streamlined Account Opening

The company asserts that its white-labeled account opening software empowers banks and their customers to initiate accounts “from any location, at any time, on any device, in under three minutes.”

Through its core account opening software, Mantl has enabled numerous community institutions – many experiencing online competition for the first time – to establish efficient and profitable digital operations. Notable clients include Cross River Bank, Quontic, and Midwest BankCentre.

Building Trust and Mitigating Risk

“Banks are inherently risk-averse, and establishing trust is paramount when integrating with their existing infrastructure,” Harley stated. “Account opening represents a relatively low-risk entry point, yet it delivers substantial value, considering that less than 50% of banks currently offer online account opening.”

Seamless Integration with Legacy Systems

Mantl directly integrates with existing core banking systems, enhancing their capabilities and accelerating the launch of new digital products.

Enhanced Efficiency and Security

The company claims its software automates application decisioning for over 90% of cases and reduces fraud by more than 60%. This translates to deposit growth that is “typically 4x faster than other solutions” and up to 10x more cost-effective than constructing a new branch.

Collectively, the institutions utilizing Mantl’s platform have onboarded hundreds of thousands of new customers and secured billions of dollars in core deposits.

Looking Ahead: Beyond Account Opening

“We are actively challenging the legacy infrastructure that constrains community institutions,” Harley emphasized, “and we view account opening as merely the initial step.”

The startup intends to allocate its new capital towards expanding its team and broadening its product portfolio, including software designed to improve and digitize the onboarding experience for both financial institutions and businesses of all sizes, from individual entrepreneurs to large commercial enterprises.

CapitalG’s Perspective

CapitalG partner Jesse Wedler shares Mantl’s conviction that banks are fundamental to the nation’s economy, both locally and nationally.

“While digitization has long been a priority for banks, it has become an urgent necessity as branches close and digital disruptors gain prominence,” he noted.

Wedler stated that Mantl distinguished itself during CapitalG’s evaluation of companies supporting banks in their digital transformation efforts, due to its superior user experience, resulting deposit growth, and rapid time-to-value for banks of all sizes.

However, Wedler added that his firm is particularly enthusiastic about the team’s vision for “transforming adjacent core banking applications.”

Since its founding in 2013, CapitalG has invested in a diverse range of fintechs, including MX, Stripe, Robinhood, Credit Karma, Albert, Aye Finance, and LendingClub.