Fintech company Mercury has successfully closed a $200 million Series D funding round, achieving a valuation of $5.2 billion. This valuation represents a significant 49% increase from its previous funding round, which occurred just 14 months prior. Mercury has managed to buck the broader fintech downturn, reaching $650 million in annualized revenue and maintaining profitability for the past four consecutive years, according to Mercury CEO Immad Akhund, who spoke with CNBC.
The latest funding round was led by the venture capital firm TCV, an investor known for its backing of prominent fintech companies such as Revolut and Nubank. Existing investors, including Sequoia Capital, Andreessen Horowitz, and Coatue, also participated in the round, as reported by CNBC.
Mercury, which specializes in providing banking services tailored for startups, has demonstrated resilience and consistent growth. Akhund stated that the company has been profitable for the past four years and recently hit $650 million in annualized revenue.
Akhund informed CNBC that Mercury has directly benefited from a surge in new business formation, a trend he attributes in part to AI. "We've seen a lot of growth, especially recently, and a lot of that comes down to AI being a big enabler for entrepreneurship," Akhund stated. He further elaborated that while many AI-focused startups are emerging, non-AI companies are also leveraging AI to accelerate the development of applications and products. This dynamic has contributed to Mercury's customer acquisition and revenue growth.
The successful fundraising announcement closely follows Mercury's disclosure that it has received conditional approval from the Office of the Comptroller of the Currency (OCC) to obtain a federal bank charter. This strategic move aligns with a larger trend of fintech and crypto firms seeking direct regulation within the traditional banking system. Acquiring a bank charter would empower Mercury to offer lending services directly, integrate with payment networks like Zelle, and reduce its dependence on partner banks, such as Column and Choice Financial.
Akhund anticipates that the final approval for the bank charter could be granted as early as 2027, contingent upon Mercury's continued development of its products and internal controls. "At the scale Mercury is at, it just makes sense to be directly regulated," Akhund said. He emphasized the strategic advantage of direct regulation for a company of Mercury's current scale, noting that Mercury is often larger than its sponsor banks, making direct regulation by bank authorities a logical and necessary step. This strategic shift also addresses potential vulnerabilities that were highlighted by the recent collapse of fintech intermediary Synapse, which underscored the risks associated with the partnership model that has underpinned much of the industry's growth.
Despite the move towards direct regulation, Akhund indicated that Mercury plans to continue its collaborations with partner banks for certain services, acknowledging that some banking functions will remain shared across institutions. The company initially gained favor among startups as a more technologically advanced and agile alternative to conventional banks. It also experienced an uplift in business following the collapse of Silicon Valley Bank in 2023.
Mercury is now focused on enhancing its digital offerings for founders and small business owners, with a particular emphasis on incorporating AI into its services. Recent innovations include tools that allow businesses to manage their accounts via AI coding assistants. The company also has plans to introduce a broader conversational AI interface later this year, designed to assist with tasks such as payment approvals and invoicing.
Regarding the company's long-term future, Akhund stated that he has no intention of selling Mercury to a larger bank, a path that competitor Brex took in January. Instead, he expressed a clear vision for Mercury to eventually become a publicly traded company. "I really want to build a strong independent brand," Akhund said. "I would like it to be a public company."
