Fintech Titan Mercury Secures $300M in Sequoia-Led Series C Funding, Doubling Valuation to $3.5B!
Digital banking has seen rapid growth, and Mercury, a pioneering startup in this space, has recently secured a significant funding boost of $300 million. This funding round has propelled the company’s post-money valuation to an impressive $3.5 billion, more than doubling its previous valuation during a Series B round in 2021.
Mercury’s Series C Funding Highlights
On Wednesday, Mercury confirmed the substantial funding to TechCrunch. The recent funding round was led by Sequoia Capital, along with participation from existing investors like Coatue, CRV, and Andreessen Horowitz, as well as new backers Spark Capital and Marathon. This marks Sequoia’s first investment in Mercury since its inception in 2017.
Key Details of the Funding Round
- Total funding raised: $300 million
- Post-money valuation: $3.5 billion
- Previous valuation during Series B: $1.62 billion
- Total funding to date: $500 million
Mercury’s CEO and co-founder, Immad Akhund, indicated that the majority of this funding was primary, although the exact breakdown between primary and secondary funding was not disclosed. The company is also planning a broader employee tender offer in the near future.
Impressive Growth and Financial Performance
Akhund shared that Mercury achieved an impressive $500 million in revenue in 2024, marking ten consecutive quarters of profitability based on both EBITDA and GAAP net income metrics. The company now serves over 200,000 customers and boasts a remarkable 40% year-over-year customer growth.
Customer Base and Payment Volume
Mercury’s clientele includes a diverse range of tech firms such as Linear, Phantom, and ElevenLabs, as well as venture capital firms, e-commerce entities, and various small businesses. The company reported a 64% increase in payment volume, reaching $156 billion.
Future Plans and Product Launches
In 2022, Mercury launched its first corporate credit card and has since been enhancing its banking services. The company is integrating software features into its bank accounts, enabling business customers to manage invoices, pay bills, and reimburse employees seamlessly. This development intensifies competition with other fintech players like Brex and Ramp.
Looking ahead, Mercury plans to introduce a consumer banking product, which was first announced in April 2024. With the new funding, the company is also considering acquisitions and aims to expand its workforce from 850 to over 1,000 employees by 2025.
Challenges and Strategic Changes
Mercury has faced challenges in recent years, including a relationship with partner bank Evolve Bank & Trust and the BaaS startup Synapse. On March 12, the company announced it would cease its partnership with Evolve and migrate customers to other banking partners, a decision that Akhund noted was already in motion since 2022.
The Series C funding round is considered one of the largest in the fintech sector for 2023, coinciding with other major developments in the industry, including Klarna’s preparations for going public.
For more updates on fintech and digital banking, check out our related articles on fintech news and digital banking innovations.
