Digital banking startup Mercury has raised $300 million in a Series C funding round, valuing the company at $3.5 billion post-money, the company confirmed to TechCrunch on Wednesday. This significant raise more than doubles Mercury's valuation since its last funding round in 2021, which valued the company at $1.62 billion post-money.

The latest round was led by Sequoia, alongside existing backers Coatue, CRV, Andreessen Horowitz, and new investors Spark Capital and Marathon. Notably, this is the first investment Sequoia has made in Mercury since the startup's founding in 2017. The raise brings Mercury's total primary and secondary funding to $500 million.

Mercury CEO and co-founder Immad Akhund shared that the startup has achieved significant growth, notching $500 million in revenue in 2024 and maintaining 10 consecutive quarters of profitability on both EBITDA and GAAP net income. The company has also seen 40% year-over-year customer growth, with over 200,000 companies as customers. Akhund declined to share revenue figures from previous years but noted that its payment volume increased by 64% to $156 billion.

Mercury's customer base is diverse, ranging from tech companies like Linear, Phantom, and ElevenLabs to venture capital firms, e-commerce companies, and small businesses. The startup launched its first corporate credit card in 2022 and has since expanded its services to include software-layered bank accounts, enabling business customers to pay bills, invoice customers, and reimburse employees. This move has put Mercury in direct competition with rival fintechs Brex and Ramp.

Akhund revealed that Mercury will be exploring acquisitions with its new capital, signaling the company's ambition to further expand its services and market presence. This development comes as the fintech industry continues to evolve, with companies like Klarna preparing to go public.

Mercury's funding round is believed to be the largest fintech funding round announced this year, a significant milestone in an increasingly crowded space. The startup has faced challenges in recent years, including drama with partner bank Evolve Bank & Trust and embattled BaaS startup Synapse. However, Mercury's decision to end its relationship with Evolve and migrate customers to its other bank partners has seemingly paved the way for its latest success.

As Mercury looks to the future, its significant valuation and acquisition plans will likely have a ripple effect on the fintech industry. With its sights set on expansion, the startup is poised to continue disrupting the traditional banking landscape and solidifying its position as a major player in the digital banking space.