In wake of SVB and First Republic collapse, CapStack collects $6M to build inter-bank marketplace
By Riley Kaminer
If you’re a bank issuing loans in Miami, there is currently no straightforward way for you to share this information even with a bank in Fort Lauderdale – much less a bank in another part of the US. Sure, you could share this information via email. But that is far from standardized, scalable, or secure.
Why does this matter? Some banks are sitting on massive amounts of deposits with no way of using them, while others have abundant opportunities but lack the cash to act on them. The recent collapses of SVB and First Republic show just how vexing of a problem this is.
It is within this context that Miami-born startup CapStack has raised $6 million from institutional investors pre-revenue and pre-product. Fin Capital led the round alongside participants including Alloy Labs, Cambrian Ventures, Cowboy Ventures, Future Perfect Ventures, Gaingels, Selah Ventures, Uncorrelated Ventures and Valor Equity Partners.
“The need for this has always been there,” CapStack founder and CEO Michal Cieplinski [pictured above] told Refresh Miami. “We just tapped into it.”
Cieplinski is a serial entrepreneur who previously co-founded Pipe, LendingClub, and Fundbox. He was also a Managing Director at BNY Mellon.
Through these experiences, Cieplinski noticed that the systems underpinning most financial institutions are antiquated. Meanwhile, the majority of Americans and US businesses use small and mid-sized banks, which will be the focus of CapStack’s platform.
Upwards of 60 banks have already agreed to partner with CapStack to design their platform. “It’s a very different way of building: building together with banks rather than building it and then dropping it in banks,” Cieplinski said. “That’s why the majority of products built for banks never succeeded.”
One aspect of the CapStack platform that particularly excites Cieplinski is leveraging AI to provide banks with additional insights. “Currently, banks don’t know how they are performing versus their peers,” he explained. “As a bank, I have no visibility – no ability to log in every day and see how my loan performance is, what’s my risk matrix. All that I can do is spreadsheets once a month. We’ll be able to automate that for banks.”
Cieplinski acknowledged that part of the reason why a product like this hasn’t been built yet is because of just how complex these processes are to accomplish – drawing parallels with the initial skepticism he encountered when in Pipe’s early days. But Cieplinski is confident that the technical side of his team, led by co-founder and CTO Tzvika Perelmuter and an Israeli R&D team, will be able to accomplish what others have not.
CapStack plans to launch a beta product by the beginning of next year. Cieplinski said that we can expect CapStack’s Miami presence to grow as the currently seven-person team is set to imminently expand.
Cieplinski is bullish on Miami, praising Mayor Francis Suarez’s support of our local tech ecosystem as well as our airport’s high connectivity and the easy availability of office space in CapStack’s home of Wynwood. “The headquarters of the company will always be Miami,” Cieplinski said.
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