Capital Ventures has made a strategic investment in Capstack Technologies, a bank-to-bank marketplace that reduces asset risk.
Capital Ventures has made a strategic investment in Capstack Technologies, a bank-to-bank marketplace that reduces asset risk.
The amount of Citi's investment has not been made public, but it follows a $6 million funding round for Miami-based Capstack last year.
The US banking industry has recently weathered stormy waters, highlighted by high-profile failures like Silicon Valley Bank, because of risks associated with asset concentration, liquidity issues, and mounting worries about investments in commercial real estate.
The 4123 community and regional banks in the nation, which together manage assets worth $3.4 trillion, can enhance profitability and reduce risk by diversifying their assets through the Capstack marketplace. It is aimed to foster openness, cooperation, efficiency, and increased profitability.
The creative strategy of stack technologies "may fundamentally change the way smaller banks manage risk and grow their businesses," according to Jeff Flynn, director of Citi Ventures. In the end, this could create opportunities for Citi to interact differently with this sizeable segment of the financial services ecosystem.
In the meanwhile, Capstack has strengthened its leadership group and established an advisory board. The board now includes Dub Sutherland of Kennedy Sutherland, Patrick Kennedy, executive chairman of TransPecos Banks, and Trey Maust, chairman of Lewis & Clark Bancorp. Randy Riffle takes over as head of client and platform operations, while David McArdle joins as head of banking connections.
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