Bucking the trend of uncertainty in the banking-as-a-service (BaaS) space, Synctera has successfully raised $15 million in a Series A extension round, bringing its total equity raised since its 2020 inception to $94 million. The funding round, co-led by Fin Capital and Diagram, is a testament to the startup's resilience and commitment to providing companies of all sizes with the necessary tools to launch and operate fintech and embedded banking products.

Synctera's CEO and co-founder, Peter Hazlehurst, attributed the company's success to its focus on compliance, which sets it apart from competitors. "While all of our competitors similarly provide the API layer needed to launch fintech and embedded banking products, Synctera's key differentiation lies in the tools and infrastructure we offer to customers and banks to manage compliance and ongoing operations," Hazlehurst explained.

The company's impressive growth metrics, including an 80% increase in revenue and a 230% increase in gross profit year-over-year, demonstrate its ability to adapt and thrive in a challenging market. Synctera's 31 customers, which include Bolt, Webull, Fruitful, Unified Signal, and Firstcard, among others, have contributed to the company's 416,000 end users on its platform, a significant increase of over 3x compared to last year.

Hazlehurst expressed pride in the company's ability to nearly double its business without requiring incremental staffing, maintaining a workforce of around 90 employees. Synctera's revenue streams are diversified, including monthly platform fees, usage-based fees for ledgers and accounts, transactions, fraud monitoring, and KYC/KYB, as well as a revenue share on interchange and interest on deposits.

The collapse of Synapse, a notable player in the BaaS space, had a mixed impact on Synctera. While it hurt in some ways, it also brought in fintechs seeking a solution and migration path to a new banking relationship. Hazlehurst emphasized the importance of prioritizing consumers and banks, citing the Synapse debacle as a cautionary tale. "What we witnessed with Synapse and Evolve clearly didn't follow that approach, which was, and is, horrible to see the massive impact on real people and their money," he said.

The industry as a whole has felt the effects of the Synapse collapse, with new fintechs facing funding challenges and increased caution in the market. Hazlehurst believes this increased scrutiny is ultimately beneficial for consumers and the industry, leading to more in-depth due diligence processes with new partners, banks, and customers.

Synctera has also recently partnered with Hawk, a company utilizing artificial intelligence to combat financial crimes such as money laundering. The new funding will be allocated towards expanding the sales team and product development, with a focus on Latin America, where the company has seen significant demand and has established relationships with large customers.

As Synctera looks to the future, its ability to navigate the complexities of the BaaS space and prioritize compliance will be crucial in maintaining its momentum and driving growth. With its latest funding round, the startup is well-positioned to continue providing innovative solutions for companies seeking to launch and operate fintech and embedded banking products.