Designing a new user interface for a bank's mobile app is a key challenge. For many customers it might be their first window into the bank, and it has to be easy and simple to use.
But developing a new front-end is only part of the problem banks face when upgrading their tech. Changing the back-office functions that exist behind the scenes is where the bulk of the work lies for smaller regional and community banks.
It was this observation that drove Jeffery Kendall to join Nymbus in September 2020 as its new CEO. The fintech provides comprehensive, out-of-the-box digital solutions for community and regional bank clients looking to reach new customer markets.
Kendall had previously spent nearly 10 years at mobile app developer Kony and its digital-banking arm, Kony DBX. It was acquired by banking software company Temenos in 2019.
"What I started seeing is that there was a big need for total digital transformation within the entire bank stack, not just the digital front end, because it was really limited to what you could really do in terms of providing new features and capabilities," Kendall told Insider.
On Wednesday, Nymbus announced that it had raised a new, $53 million Series C round led by Insight Partners. The a capital raise will allow the company to pivot from only spending on feature development to also investing in go-to-market strategy and research that will help the startup grow, Kendall said.
Smaller banks have been forced to adopt digital offerings
Nymbus' fundraising comes at a time when the COVID-19 pandemic has revealed the particularly acute challenges smaller banks face in ramping up their tech infrastructure, particularly as more and more customers expect digital and mobile-first bank offerings. Confronting a highly competitive pool for tech talent, many banks large and small are partnering with banking-as-a-service fintechs in order to stay ahead — or at least on par — with rivals.
"Everybody understood the importance of digital before, but that compelling sort of reason to triple down on your investment was harder to see prior to COVID," Kendall said.
To date, the startup has partnered with Massachusetts-based PeoplesBank and Florida's Pacific National Bank, among others, to help them launch their own standalone digital-only bank brands. Through the last 12 months, Nymbus has launched 12 such banks, the company said.
Nymbus also offers more tailored digital tools, like loan origination and new account opening features, for bank clients.
While Nymbus declined to disclose a valuation, Kendall said the company recently added a regional bank with more than $50 billion in assets to its client roster. "That was a milestone in the company, just in terms of the size of institution that made a bet on us," he said.
Kendall is no stranger to Insight — the venture firm invested in Kony when he was there.
"One of the things I love about Insight, which I try to leverage and take advantage of as much as possible, is that they're very good about providing industry-validated or experience-validated resources to companies that are scaling up in size like we are," Kendall said.
"It's always great when you have people that you know, trust, and understand along with you on the journey," he continued.
At Insight, Peter Sobiloff leads the Nymbus relationship. A 23-year veteran of the firm, Sobiloff sits on Nymbus' board and will now be joined there by another Insight executive, AJ Malhotra.
Sobiloff told Insider via email that Nymbus "fits the bill" of the type of company Insight looks for.
"We were impressed by the platform, the business model, and leadership that will allow the company to continue scaling successfully," Sobiloff wrote.
To Kendall, the investments smaller banks are now making in digital tech will pay off — especially since he thinks they'll open up new customer segments for community and regional banks and allow them to grow their footprint.
"For the past hundreds of years, community and regional banks thought about their market opportunity as the area codes or the zip codes that they serve. But with digital, of course, geographic boundaries matter no more," he said.