Mercury Raises $300M Series C, Valuation Doubles to $3.5B

Mercury Secures $300 Million Funding at $3.5 Billion Valuation

Mercury, a digital banking startup, has successfully completed a funding round of $300 million, encompassing both primary and secondary investments. This investment results in a post-money valuation of $3.5 billion, as the company confirmed to TechCrunch on Wednesday.

Significant Valuation Increase

This valuation represents a substantial increase compared to Mercury’s previous funding round. The startup’s valuation more than doubled since its $120 million Series B raise in 2021, which had valued the company at $1.62 billion post-money.

Round Details and Investors

Sequoia spearheaded the latest Series C funding round. Existing investors, including Coatue, CRV, and Andreessen Horowitz, also participated. Additionally, Spark Capital and Marathon joined as new investors. This marks Sequoia’s initial investment in Mercury since the company’s founding in 2017.

To date, Mercury’s total funding, including primary and secondary investments, reaches $500 million. According to Mercury CEO and co-founder Immad Akhund, the majority of the Series C funding was comprised of primary investment.

Future Plans and Financial Performance

A broader employee tender offer is planned for a future date, as stated by Akhund. Furthermore, Mercury reported $500 million in revenue for 2024.

The company has demonstrated consistent profitability for ten consecutive quarters, based on both EBITDA and GAAP net income. This financial stability supports its growth initiatives.

Customer Growth and Base

Mercury currently serves over 200,000 companies and has experienced a 40% year-over-year increase in its customer base. Payment volume has increased by 64%, reaching $156 billion.

Its clientele includes a diverse range of businesses, from technology companies like Linear, Phantom, and ElevenLabs, to venture capital firms, e-commerce businesses, and various small enterprises.

Product Expansion and Competition

In 2022, Mercury introduced its first corporate credit card. Last May, the company expanded its offerings by integrating software directly into its bank accounts.

These new features enable customers to manage bills, generate invoices, and process employee reimbursements. This expansion positions Mercury in direct competition with fintech companies such as Brex and Ramp.

Upcoming Consumer Banking Product

Mercury intends to launch a consumer banking product later in the year, an initiative initially announced in April 2024.

Strategic Growth Initiatives

The newly acquired capital will be allocated towards potential acquisitions and workforce expansion. Mercury currently employs 850 individuals and aims to exceed 1,000 employees by 2025.

Resolution of Banking Partnerships

Recent years saw Mercury navigate challenges with its partner bank, Evolve Bank & Trust, and BaaS startup Synapse. On March 12th, Mercury announced the termination of its relationship with Evolve and the migration of customers to alternative banking partners.

Akhund clarified that Mercury had ceased directing new customers to Evolve as early as 2022.

Largest Fintech Funding of the Year

Mercury’s Series C funding is considered the largest fintech funding round announced this year, coinciding with Klarna’s preparations for an initial public offering.

Note: This article has been updated following its initial publication to include supplementary details and commentary from Mercury’s CEO.