Mercurya startup that provides banking services to other startups, is offering clients expanded FDIC insurance of up to $3 million via a new product on the heels of Silicon Valley Bank. Collapses. This is 12 times the industry standard for organizations with $250,000 in FDIC insurance offered by other organizations.
Imad Akhund, CEO and co-founder of Mercury, told TechCrunch that his team worked on the new product, called Mercury Vault, over the weekend.
Customers, existing and new, with more than $3 million in their accounts will be required to move the money into Mercury Treasury’s Vanguard money market funds, 99.5% of which is invested in US government-backed securities (mutual funds mostly made up of Treasury bills) and is 100% owned in the name of the client. As the company continues to work on the product, customers will have the option to have this money movement automated.
“So if you need $2 million in your operating account, we’ll make sure you have $2 million in there so you can set up payroll and things like that, and the rest will go into the US government and treasury bills and mutual funds,” Akhund said.
To be clear, Mercury itself is not a bank. Through its partnerships with Choice Financial and Evolve Bank & Trust, it is able to provide its clients with access to a “comprehensive network” of other banks such as Goldman Sachs and Capital One.
With the Vault, Akhund said, not only do customers get expanded FDIC insurance of up to $3 million, but deposits will also be spread across up to 12 different banks to spread out risk and allay fears.
According to Akhund, the Vault will also “constantly monitor cash across accounts and recommend measures to keep every dollar as safe as possible.”
He said, “Before Thursday, I think a lot of people didn’t think about who actually has the money and is it safe?”
Overall, since news of SVB’s problems became public, Mercury has had an “enormous number of sign-ups,” he says. While its clients are mostly startups, Akhund says the company also caters to investors and received insider interest from venture capitalists looking to move money around last weekend as well.
Mercury It has more than 100,000 customers and says it has made a profit since last August. It processed more than $50 billion in transactions in 2022, up from $23 billion in 2021. The company says 50% of YC groups “have chosen Mercury as their banking partner.”
Since its inception, Mercury has raised $163 million from investors like Andreessen Horowitz (a16z), CRV, Coatue, and more. It was her last tour $120 million Series B Announced July 2021.