The country’s only tech-enabled deposit network is leaving behind competitor networks that still use manual processes
While fintech funding languished in 2023, deposit management platform ModernFi is an exception going into 2024, having just closed an $18.7 million Series A funding round. The platform serves community and regional banks by helping them grow, retain, and manage their deposits.
Paolo Bertolotti and Adam DeVita, who met as undergraduates at Columbia University founded the fintech startup in 2022. Though working in separate career paths, both focused on deposit and cash management before starting ModernFi.
Bertolotti completed a PhD at MIT and DeVita worked as a Product Manager at Citi. With a strong view of the role of community banking in the American economy, they joined forces.
“Community and regional banks form the foundation of the American economy, providing an outsized amount of credit and banking services to critical industries and areas that might otherwise be overlooked,” said Bertolotti. “Faced with fundamental shifts in the behavior of deposits, institutions benefit from modern tools to manage and grow their funding”.
Knowing the pressure that community banks experience to maintain their deposit base, ModernFi operates a deposit network to optimize each bank’s base by sweeping funds, sourcing deposits, and providing extended insurance to depositors through program banks. The platform also enables banks to gain large-value depositors, driving growth and increasing balance sheet stability.
“The industry needs a next-generation solution for reciprocal deposits that is seamlessly integrated into online banking, built both API-first and cloud-native,” said Neil Underwood, Co-Founder and General Partner at Canapi who led the Series A round. “ModernFi has built exactly that, at the exact right time and place. Canapi’s strong bank network and deep fintech experience will help accelerate significant deposit flows through the platform.”
ModernFi touts that it is now the country’s only tech-enabled deposit network, leaving behind competitor networks that still use manual processes that are limited in adopting and using network products. Built on a modern tech stack, ModerFi’s platform eliminates the friction for depositors, removing the operational burden for banks, and unlocking the full potential of sweep and reciprocal products.
The two-year-old fintech startup gained the support of top venture capital funders and regional banks that included Andreessen Horowitz, Remarkable Ventures, and leading banks Huntington National Bank, First Horizon, and Regions. The current round adds to a $4.5 million seed round led by Andreessen Horowitz, bringing the company’s total raised to over $23 million to date.
