Finxact Secures $12 Million in Seed Funding for Cloud-Based Core Banking Solution

New Core-as-a-Service offering will enable banks to quickly address the service requirements of today’s always-on, digital-first customers

Finxact announced it has raised $12 million in seed funding from strategic investors and angels that include Live Oak Ventures and other industry pioneers. The investment represents one of the largest seed financings of its kind for fintech companies in recent years. It will be used to complete development of the Finxact Core, which is targeted for its first live customers in 2017 and general availability in 2018.

According to a recent KPMG study, 39% of banks have already begun replacing their entire core system and an additional 21% are in the planning stages of a complete replacement. Finxact’s investors understand the challenges legacy vendors and next-gen core banking in the cloud vendors face to deliver a true, enterprise-class core banking solution. Many of the next-gen vendors are focused on de novo banks, new entrants in fintech, and “challenger banks.” Finxact is focused on existing banks whose core banking needs are much more comprehensive.

Frank Sanchez, Finxact CEO and founder said, “We are fortunate to have the support of the banking and financial services industry. We have known, and worked with our investors for 30+ years, and together we have delivered new core solutions to banks of every size. Today, we have the depth in our team, the know-how, the technology, a great set of early customers, and now – the initial resources, to launch a new class of core banking as a service.”

“We’ve been building and delivering enterprise class core banking for decades and Finxact is taking a unique approach to solving the significant problems banks face today,” said Mike Sanchez, Finxact founder. “It is critical that banks have the flexibility to rapidly respond to consumer demands, and the Finxact team is uniquely qualified to deliver the technology that will enable this.”

Finxact’s founders, Frank and Mike Sanchez, are industry pioneers who have been at the forefront of core banking software since developing the first real-time core banking solution for Internet banks in the 1990s with Sanchez Computer Associates. The entire Finxact team, which has been involved in core banking for decades, is focused on creating an open API, cloud-based Core-as-a-Service platform that will enable the next generation of always-on, digital-first banking.