Fed Holds Rates Steady; Monk Announces Series A; Mercury Gets OCC Nod

U.S. consumer confidence ticks up. FOMC holds rates steady (but with four dissenting votes). Kashable raises $60Mn. Monk announces Series A. Mercury secures conditional charter approval. OppFi to acquire BNC National Bank. Coastal and Evolve negotiate over fintech program sale.

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Consumer Confidence Ticks Up

U.S. consumer confidence unexpectedly ticked up last month. The measure hit 92.8 in April, an increase of 0.6 points vs. March. Consumers' view of the labor market improved, and continued strength in the stock market helps explain consumers’ somewhat improved outlook. Although there is ostensibly a “ceasefire” in the U.S.-Iran conflict, the wider region remains unstable, with continued uncertainty over if and when traffic through the Strait of Hormuz could return to something more closely resembling normal levels. The ongoing closure/blockage is driving up the price consumers pay at the pump, and they’re certainly noticing that.

Meanwhile, the Fed decided to keep its key interest rate where it is, targeting a range of 3.5%-3.75%, during its meeting last week. The decision to hold rates steady was widely anticipated by the markets. But it was far from a unanimous decision for policymakers, with an unusual level of dissent. The FOMC voted 8-4 to keep rates where they are. The last time four policymakers dissented was in 1992.

Kashable Raises $60Mn

Consumer lender Kashable announced that it has raised a $60Mn Series C. The round was led by Goldman Sachs, with the investment bank committing to invest up to $50Mn in the company. Existing investors EJF Ventures and Revolution also participated in the round. Kashable describes itself as providing “socially responsible” credit, which it does by partnering with employers to offer its product. This, the company says, means it can offer better rates than traditional lenders can, particularly for borrowers with less-than-prime credit. Kashable cofounder and co-CEO Rishi Kumar told Crunchbase the company has grown more than 40% year-over-year and that it has funded a total of $2Bn in loans to date. The company also says that it is profitable and has been for “several” years.

Greg Shell, a partner at Goldman Sachs Alternatives, commented on the deal, telling Crunchbase, “The American workforce is facing a significant squeeze as job security and wage growth has struggled to keep pace with inflation, eroding personal savings and the ability to absorb unexpected financial pressures. We recognized Kashable’s model and mission as differentiated, providing essential liquidity on fair, transparent terms, in a way that is substantial enough to offer true long-term relief rather than a short-term, expensive Band-Aid.”

Monk Announces Series A

Accounts receivable platform Monk announced it has raised a $25Mn Series A. The round was co-led by Acrew Capital and Footwork, with participation from Better Tomorrow Ventures. The latest financing brings Monk’s total capital raised to date to $29Mn, including its seed round. Monk’s accounts receivable platform is designed to leverage AI to automate AR processes and workflows. The company said it plans to use the new funds to continue developing its platform and product. Monk CEO told FintechFutures that he and his cofounder “obsess over making AI accurate enough to handle real money.”

Mercury Secures Conditional Charter Approval

Business banking startup Mercury has secured conditional approval of its bank charter application from the Office of the Comptroller of the Currency, the company announced in a press release last week. Mercury has more than 300,000 business customers and generates $650Mn in revenue on an annualized basis, the company said in the same announcement. Mercury will now begin actually organizing Mercury Bank, as well as continuing to work on obtaining the necessary FDIC and Federal Reserve approvals.

OppFi to Acquire BNC National Bank

Chicago-based fintech lender OppFi announced it has entered into a definitive agreement to acquire BNC Corp, Inc. and its subsidiary, BNC National Bank. The cash-and-stock transaction is worth approximately $130Mn. Nationally-chartered BNC is based in Arizona and has approximately $1.1Bn in assets and $1Bn in deposits. OppFi CEO Todd Schwartz commented on the acquisition, saying, “The transformative combination of OppFi's digital-first platform and BNC's national bank charter unlocks significant opportunities for growth and product diversification. Combining our operations under unified regulatory supervision by the OCC and Federal Reserve simplifies and strengthens our compliance and risk management. This will position OppFi/BNC for long term scalability and sustainable growth. We are excited to get to work with BNC's team to maximize the strengths of our businesses and continue to find ways to better serve customers who have been traditionally underserved by banks.”

Coastal Negotiating to Take Over Certain Evolve Fintech Programs

Coastal Community Bank may acquire certain fintech programs from Evolve Bank & Trust, according to an 8-K the Washington-based bank filed last week. According to the filing, the two companies have signed a non-binding term sheet. Coastal and Evolve will conduct due diligence on “certain” of Evolve’s programs and work to negotiate and execute definitive agreements for any programs Coastal agrees to acquire.