Sila Banks $13M to Simplify Financial Product Development with Single API

Sila Secures $13 Million in Series A Funding to Revolutionize Financial Product Development

Sila, a company focused on providing banking and payment solutions for software developers, has announced the successful completion of a $13 million Series A funding round. This investment will be utilized to further develop its platform and expand its team.

Investment Details and Backers

Revolution Ventures spearheaded the funding round, with participation from existing investors including Madrona Venture Group, Oregon Venture Fund, and Mucker Capital. Notably, Taavet Hinrikus, the co-founder of Wise, also contributed to this round.

This latest funding brings Sila’s total investment to $20 million, positioning the Portland, Oregon-based company for continued growth and innovation.

Company Origins and Leadership

Founded in 2018 by Shamir Karkal, Angela Angelovska, Isaac Hines, and Alex Lipton, Sila was created to streamline digital payments and storage while ensuring regulatory compliance. The company leverages blockchain technology to achieve this goal.

CEO Shamir Karkal brings significant experience to the role, having previously co-founded Simple, a pioneering financial application acquired by BBVA in 2014 for $117 million. Simple was ultimately discontinued earlier in 2024.

Addressing the Challenges of Modern Financial Integration

Karkal explained that the genesis of Sila stemmed from difficulties encountered while attempting to establish another banking institution. He identified a critical need for improved financial application development tools, but found the existing banking infrastructure to be outdated and restrictive.

He observed that consumers now anticipate a higher standard of financial service, driving the popularity of fintech companies.

Simplifying Compliance and Integration

Karkal highlighted the complexities businesses face when attempting to connect fintechs, cryptocurrency innovations, and traditional banking systems. Scaling operations often leads to technological and compliance hurdles.

“Integrating with banks necessitates navigating their legacy mainframe systems,” he stated. “This often requires extensive compliance expertise simply to initiate the process.”

Sila’s Accelerated Implementation

While previous ventures required three years to establish banking processes, Sila achieved the same result in just 18 months. The company’s APIs empower developers to build custom digital wallets, eliminating the need for direct integration with older financial institutions.

Sila maintains partnerships with key fintech platforms like Plaid, Alloy, Lithic, and Arcus to facilitate money movement, and is backed by Evolve Bank and Trust.

Rapid Growth and Market Focus

Sila can now onboard new customers within six to eight weeks. The company differentiates itself by focusing on regulated payments within complex sectors such as fintech, insurtech, commercial real estate, and cryptocurrency, rather than solely targeting e-commerce.

Since launching its platform, Sila has experienced consistent growth, with a significant acceleration in the latter half of 2020. The company previously secured a $7.7 million seed round earlier in the year.

Over the past year, Sila’s revenue has increased tenfold, and its customer base has expanded by over 500% in the last seven months.

Future Plans and Expansion

The newly acquired funding will be allocated to expanding the team, forging additional partnerships, and enhancing product features. This includes support for Ethereum MainNet stablecoin issuance and interoperability between FedWire and the Nacha Automated Clearing House network.

“The fintech landscape in the U.S. is experiencing rapid growth, and we’ve only begun to tap into its potential,” Karkal commented. “Similar acceleration is possible in regions like India, Africa, and Latin America, as they are often starting from a less developed financial infrastructure.”

He added, “Our mission is to empower innovators and provide end users with a superior financial experience.”

Board Addition and Investor Perspective

As part of the investment, Clara Sieg, a partner at Revolution Ventures, will join Sila’s board of directors. Sieg initially connected with the company’s founders through the Portland technology ecosystem.

Revolution Ventures typically evaluates fintech startups from a consumer-centric viewpoint. Sieg’s firm recognized the need for a company focused on building the underlying infrastructure to address the challenges of integrating with traditional banks.

Competitive Landscape

Sieg identified Dwolla as a competitor to Sila, noting Dwolla’s recent $21 million raise to further develop its API for fast payments, particularly within the ACH network.

However, she emphasized that success ultimately depends on acquiring customers, and that the competitive landscape remains relatively open.

“Sila is creating a user-friendly platform for programming money, while prioritizing regulatory considerations,” Sieg stated. “Shamir’s experience building Simple demonstrated his understanding of the difficulties incumbents face in providing the tools developers need, and this gives us confidence in his ability to succeed.”