Thread Raises $30 Million to Boost Embedded Banking

The new funding, announced Tuesday (Dec. 16), comes in the form of a $27.6 million initial raise and a $2.9 million extension, the lender said.

“From the outset, our mission at Thread has been to use technology to meet customers where they live their financial lives and conduct their financial business, challenging traditional methods and paradigms for delivering banking products and services,” said Chris Black, CEO, president and member of the Thread board.

“This funding round, backed by seasoned financial technology and banking investors, serves as a resounding vote of confidence in our team, embedded approach and customer-first vision for the future of banking,” Black added.

The release noted that the funding follows a period in which Thread has seen its partners’ deposits grow to more than $2 billion, with embedded deposits increasing by three-fold between January of last year and October.

In the past year, Thread has formed partnerships with Finxact, selecting that firm as its new core banking platform and working with LoanPro to update its lending operations. The company also opened its new headquarters in Nashville, Tennessee, in April.

With the new round, Thread’s total funding now exceeds $100 million.

“Backed by new capital, Thread aims to continue its recent growth and momentum, scaling and broadening its embedded banking offerings to drive the industry forward and serve as a model for fellow community banks,” the release added.

Writing about the embedded finance space earlier this month, PYMNTS contended that it is transforming both how transactions happen and where financial relationships originate. What once existed at the edge of apps and platforms is now embedded straight into the daily workflows of consumers and businesses, allowing banks to enjoy new revenue streams and balance sheet growth.

“At the center of this shift are digital connections. Application programming interfaces, cloud infrastructure and real-time data flows have made it possible to integrate payments, deposits and lending directly into non-financial platforms,” the report said. “These connections are powering faster checkout, embedded wallets and instant access to financial services. They are also reshaping traditional financial institutions, which increasingly serve customers they may never meet directly.”

Meanwhile, research by PYMNTS Intelligence shows that embedded finance “is no longer experimental,” the report said. Almost every company surveyed offers at least one embedded finance capability, and upwards of 90% said they are satisfied with the results.

“Embedded finance is now viewed as foundational to growth, customer engagement and competitive differentiation,” PYMNTS wrote.