The future of BaaS (banking-as-a-service) is top of mind for fintech leaders around the world right now.
It’s a major topic this week at Techcrunch Disrupt, a popular startup technology summit in San Francisco and is headlining thought pieces and news articles across the fintech world.
The reality is that the BaaS world might be at a turning point, says Charlotte-based entrepreneur Ramy Serageldin.
“The legacy BaaS models pitch was predicated on the fact that the bank could just sit back and the BaaS platform would do the rest, including oversight and compliance. Unfortunately, in many cases this model led to a lack of proper compliance practices and some banks not performing the proper reconciliation activities,” Serageldin said. “As a result, there have been many regulatory consent orders and, in one case, a catastrophic collapse of a BaaS provider. The regulators have made it clear that this model cannot persist.”
That’s where the new Southeast-based startup Spidr comes into play.
Launched in Nashville by co-founders Joyce Mehlman and Serageldin earlier this year, Spidr is a B2B platform that offers fintech companies a software to develop, launch, and expand embedded banking and fintech products. Its unified API platform helps startups offer financial products like debit cards, savings accounts, and credit cards to their customers, while preserving the direct relationship with bank partners.
“Spidr’s approach focuses on maintaining the direct relationship between the bank and the client, while we focus on simplifying the technology integrations needed to launch your product and providing the tools to perform the compliance and operations activities,” Serageldin added.
The early-stage company is targeting customers who are early-stage fintech companies and middle-market businesses — like retail, payroll, medical services — that want to expand their embedded banking products.
New Funds Into Fintech
Investors have taken note of Spidr’s early work.
Earlier this week the startup announced it closed a $1.7 million seed round, led by Cary, North Carolina-based VC firm Cofounders Capital.
“We firmly believe that a majority of banking services will be offered through non-banks in the future – your insurance app, your budgeting app, or other software products that touch payments, lending, or could issue debit and credit cards to their customers,” Cofounders Capital’s Partner Tobi Walter said in a statement.
“There needs to be an easy way for those companies to offer these services and not only do we believe the Spidr product does the best job of that in the market today, but we could not think of a better founder-market fit than what we have found in Ramy and Joyce!”
Get To Know The Team
Both Mehlman and Serageldin are fintech industry veterans, bringing decades of experience to the early-stage startup world.
Serageldin was the co-founder and CEO of Charlotte-based Honeyfi (acquired by Strategic Financial Solutions) before joining Wells Fargo as the Head of Connectivity Solutions.
Mehlman previously served as the Principal Consultant and founder of iLex Consulting Group, where the idea for Spidr was incubated.
While the startup’s name was initially a play off of the spider plant, it has “morphed to represent the complex web of financial solutions that are needed to bring a product to market,” Serageldin told Hypepotamus.
The team is currently six people but hiring plans are on the horizon, Serageldin told Hypepotamus.
Following the funding news, Spidr is publicly launching this week at Money2020, the popular fintech conference in Las Vegas.
Following the conference, Serageldin said the team is focused on connecting with potential clients and building up its pipeline.
“We’re also excited to meet with additional bank partners who are looking to get into the space the right way. We are also exploring raising a bit more capital as part of this round which will enable us to accelerate our product development to include lending,” he added.
