There’s a startup in Texas that’s been quietly building the technology that powers mobile banking apps.
Plano-based Alkami has developed a white label service that credit unions and banks use across digital platforms.
And Alkami’s 4.5 million users have generated enough revenue for the company to justify a $70 million Series D round, led by General Atlantic, with participation from MissionOG. Existing investors include S3 Ventures and Argonaut Private Equity. This adds to the over $46 million the company has raised since it was founded in 2009.
Stephen Bohanon, founder of Alkami, started the business during the financial crisis when there “wasn’t a lot of innovation that was happening in the digital banking space.” Says Bohanon, there was an opportunity because “outside of the top roughly 20 banks, most everyone else relies on a third-party vendor to offer the solutions.”
Alkami has a SaaS model, charging its clients based on the number of users per month. He says the company will be using the funding to invest in innovation and sales.
Raph Osnoss, a vice president at General Atlantic, said that Alkami fits within the private equity giant’s investment strategy, which has been a long-time investor in financial technology. He said that Alkami stood out because they pioneered a “modern, mobile-first experience.” Osnoss wouldn’t confirm that Alkami is on an IPO track, but acknowledged that the team is “open-minded to longer-term alternatives for the company.”
Osnoss will be joining the board of directors. Former MasterCard Worldwide CEO Gene Lockhart will also be added to the board.