Funding for digital bank Grasshopper Bank increases by $46.6 million
Grasshopper Bank Secures $46.6 Million Investment to Transform Digital Banking
Grasshopper Bank, a digital bank catering to specific industries, has secured a $46.6 million funding round led by Patriot Financial Partners and Glendon Capital Management. This investment will support Grasshopper's merger with Auto Club Trust, enabling the bank to expand and scale its digital banking platform, broaden its product offerings, and grow its technology infrastructure.
The merger with Auto Club Trust, which took place in April, has provided Grasshopper with access to a large customer base (13.8 million from the American Automobile Association). This move has allowed Grasshopper to evolve from a business-centric bank to a broader digital banking platform that incorporates banking-as-a-service elements.
Grasshopper's CEO, Mike Butler, emphasised the bank's vision to redefine digital banking for modern businesses and consumers. He viewed the funding as a "powerful vote of confidence" in the bank's mission, strategy, and team.
With the investment, Grasshopper plans to scale its technology systems to support expanding operations. The bank also intends to expand its product range beyond business banking to include consumer banking. This expansion will be achieved through partnerships like the one with The Auto Club Group.
The funds will also be used to grow Grasshopper's market reach by leveraging affinity partnerships. Four new members have been added to Grasshopper's board to guide the bank through this next phase: James Fitzgerald, Brian Graham, Karen Solomon, and John M. Surgent.
Karen Solomon, a bank regulatory lawyer with over three decades of experience spanning the public and private sectors, brings valuable expertise to the board. John M. Surgent, the Founder of GMS Surgent CPAs, Surgent Professional Education, and JM Surgent Capital, offers a wealth of financial and accounting knowledge. James Fitzgerald, a retired former Chief Administrative and Chief Financial Officer of Eastern Bankshares Inc. and Eastern Bank, brings extensive financial management experience. Brian Graham, a co-founder and partner in the Klaros Group, brings strategic insight to the table.
Following the merger, Grasshopper Bank's total assets grew to $1.33 billion, and its total deposits reached $2.37 billion. The bank's loans amounted to $961.8 million. Grasshopper Bank was founded in 2016 as a full-service digital bank, and this investment marks a significant step in its growth journey.
The bank plans to continue developing innovative digital banking solutions tailored for entrepreneurs, startups, and modern businesses. This includes enhancing secure depository accounts, flexible lending solutions, and financial tools designed to support business growth. The bank also aims to launch new consumer banking services to cater to a broader audience.
In conclusion, Grasshopper Bank's $46.6 million funding round is a significant milestone in its mission to redefine digital banking for modern businesses and consumers. With its expanded product offerings, growing market reach, and advanced technology infrastructure, Grasshopper Bank is well-positioned to lead the digital banking revolution.
The investment of $46.6 million will support Grasshopper Bank in expanding and scaling its digital banking platform, broadening its product offerings, and growing its technology infrastructure, as it aims to redefine digital banking for modern businesses and consumers.
With the funds, Grasshopper Bank intends to scale its technology systems to support expanding operations and expand its product range beyond business banking to include consumer banking.