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Nymbus<\/a>, a startup that partners with banks to migrate their legacy stack and launch neobanks to attract new customers, today announced that it raised $70 million in a Series D round led by Insight Partners. The Banc Funds Company and Mendon Venture Partners participated also, as did Nymbus clients ConnectOne Bank and PeoplesBank.<\/p>\n According to CEO Jeffrey Kendall, the new capital will be put toward investing in scaling Jacksonville-based Nymbus\u2019 various products and services, particularly its core transaction processing engine and platform for commercial banking,<\/p>\n \u201cWhile banks and credit unions require a robust technology stack to support operations, the market is limited to options that are often over 30 years old,\u201d Kendall told TechCrunch in an email interview. \u201cIn 2015, Nymbus launched its cloud-based core banking platform for financial institutions to provide a robust option for replacing legacy technology and reducing technical debt. The solution has grown over time to streamline operations, offer new routes to growth and enhance the overall customer experience.\u201d<\/p>\n Co-founded in 2015 by Alex Lopatine and Scott Killoh, Nymbus emerged at a time when millennials and Gen Z banking customers began looking to online alternatives to traditional banks \u2014 spurred in part by a desire to find better rates. According to a survey<\/a> from GOBankingRates, nearly 30% of Americans ages 25-34 now use online banks, while 21% of Americans of any age have adopted them.<\/p>\n Banks, unsurprisingly, are feeling the pressure to adapt to a changing world by modernizing and digitizing both their operations and products. But most of them aren\u2019t equipped to do so. According to a 2021 McKinsey study<\/a>, only 30% of banks that\u2019ve undergone a digital transformation report successfully implementing their digital strategy, and the majority fall short of their stated objectives \u2014 whether because of technical debt, siloed IT architectures or an unbridgeable gap between the business and IT departments.<\/p>\n Nymbus aims to boost the success rate with a cloud-based banking solution that offers traditional banks features like API access, event-driven alerting and features, robotic process automation and more. Banks and credit unions can integrate the functions they require to expand their digital capabilities, enhance their back-office processes or introduce new products.<\/p>\n There\u2019s a number of companies that offer this type of \u201cbanking-as-a-service (BaaS),\u201d like NovoPayment<\/a>, a startup based in Miami that\u2019s largely been focused on offering its API platform to customers in the Latin American market. There\u2019s also Bud<\/a>, which recently raised $80 million to expand its AI-based open banking platform, frequently used by banks to power lending tools.<\/p>\n BaaS has become the industry norm, in fact. A 2022 Finastra poll<\/a> of U.S. financial institutions and banks found that 86% agree BaaS is already expected by customers, while almost half (46%) have improved or deployed a BaaS solution in the past year. According to one estimate<\/a>, the BaaS market was valued at around $20 billion in 2021 and could grow over 16% from 2022 to 2030.<\/p>\n But Nymbus stands out for its ability to deliver a \u201cfully managed digital bank,\u201d Kendall says, which includes a \u201cunified data stream\u201d that can be used for data analysis, decision-making and strategic planning. The modular nature of the platform, moreover, can reduce costs without sacrificing \u201coperational excellence,\u201d in Kendall\u2019s words \u2014 making it cost effective.<\/p>\n \u201cNymbus\u2019 product suite, which includes core processing, loan origination, account opening and digital channels, coupled with operational resources, empowers financial institutions of all sizes to tap into new market segments and drive growth,\u201d he said. \u201cEase of maintenance and speed to market are key for the CIO and this is what the\u00a0Nymbus<\/span> solution delivers.\u201d<\/p>\n That\u2019s certainly a lot to promise. And Nymbus, when asked, declined to say how many customers it\u2019s currently serving and its projected recurring revenue, which tends to be a predictor of success (albeit not a foolproof one). Still, despite his reluctance to peel back the curtains on the company\u2019s operations, Kendall asserted that Nymbus \u2014 which has around 200 full-time staffers and contractors, currently \u2014 is well-positioned to weather headwinds in the coming months.<\/p>\n \u201cThe general economic uncertainty and slowdown in tech funding has made securing resources for expansion and innovation more difficult,\u201d he said. \u201cBut we have solid solutions in our portfolio to support the growing need of banks and credit unions to modernize and meet their customers where they are \u2014 in the digital realm. We believe that as banks increasingly realize the importance of modernization, there will be a continued demand for our services.\u201d<\/p>\n<\/p><\/div>\n