Bank payments infrastructure provider Finzly has closed a $10 million Series A funding round led by TZP Growth Equity, the firm announced last week.
This is a first for Finzly, which has operated since 2012 and supplies back-office operations to banks including First Horizon, Synovus, and recently, Metropolitan Commercial Bank.
"We are investing in Finzly due to its innovative approach to creating flexible payments and banking solutions. Their technology aligns with our vision of supporting companies that contribute to the evolution of the banking and financial sector," TZP Partner Shamit Mehta said in a prepared statement. "Finzly stands out from the competition through its unique platform that allows for the seamless integration of various banking services through its modern architecture.
“Their commitment to utilizing cutting-edge technology lowers the total cost of ownership and positions them as a true forward-thinking partner to their customers," he said.
By consolidating all payment rails into a single platform — including FedNow, reporting that it was the first to offer an API connection to the new rail — Finzly purports to be the first true “payments core” on the market.
CEO and founder Booshan Rengachari built Finzly out of inspiration he got as Wachovia Bank’s head of international when it was acquired by Wells Fargo.
It was during that merger, he said, he discovered “so much technical debt that has grown at the banks over a period of time — 30-, 40-year-old technology that doesn't allow us to do what we want to do today, that makes something that should take a matter of weeks take a matter of months.”
He stayed with Wells following the transition. But as an engineer, got the itch to be a fixer.
“I couldn't stand the challenges the banks were dealing with,” he told Banking Dive while at the Money 20/20 conference in Las Vegas. “Even today, if you look at it, banks have 30- or 40-year-old mainframe systems. Over a period of time, they have created layers and layers of patches to make the customers happy, but behind the scenes, they are dealing with a lot of errors, inefficiencies, reconciliation issues.”
Rengachari developed Finzly as an operating system with which banks can supplant their old mainframes.
“We wanted to have an operating system for the banks so that if the bank wants to launch a new product or service, they can just add it and then go to market faster,” he said. “So today, using our technology, banks can launch a new payment core or banking core in less than 10 minutes. What that does is it gives the bank a cleaner place to start.”
Jumping from Wells in 2012 meant taking a chance, but Rengachari said he needed to take it.
“I talked to my wife and I told her, hey, worst case I'm going to lose all my savings. And in that case, at least I feel happy that I tried. I wanted to do something to make a difference,” he said. “So that's how the whole journey started — and I didn't lose the money.”
Rengachari said the fresh $10 million in funding will be used to “develop the product roadmap,” focusing on customer service and scaling the marketing and sales teams.
“We have been profitable from year one. I have spent my blood and sweat on this one,” he said. “We make good use of every dollar, so even the money that we have received, we're going to make good use of that money to really grow. We are not going to just blindly go spend and [seek] growth at any cost.
Rengachari said that takes discipline.
“If you look at this current market, there are a lot of fintechs that just make so much noise even without a product,” he said. “We have a really good product and now it's time for us to make some noise.”
