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August 11, 2011

BankSimple Raises $10 Million in New Investment and Forms Partnerships

By Ed Silverstein, TMCnet Contributor

BankSimple has raised $10 million from investors in a new funding round led by IA Ventures. Also taking part in the Series B round were existing investors and Shasta Ventures.

The new investment will combine with $3.1 million from Series A and seed money that the startup saw from various investors including First Round Capital, IA, Village Ventures, SV Angel and others.

“Our business has many moving parts and this capital allows us to scale our engineering, operations, and customer service organizations in preparation for launch,” the company said in a blog post.

In related news, BankSimple has developed partnerships with Visa, CBW Bank, Allpoint, The Bancorp Bank, Andera and TxVia. Visa cards will let BankSimple’s customers make purchases and receive cash back at millions of merchants, the bank said. In addition, BankSimple customers’ deposits will be held in FDIC-insured accounts at The Bancorp Bank and CBW Bank, BankSimple adds.

And the partnership with Allpoint – which is described as the largest U.S. surcharge-free ATM network – will offer BankSimple customers access to over 43,000 ATMs nationwide, without fees.

Also, TxVia will provide a variety of financial products for BankSimple, including processing for payment cards, according to a report from TMCnet. TxVia will provide BankSimple with a customized and segregated processing platform running on a hybrid private elastic compute grid that interfaces securely with BankSimple's cloud infrastructure, TMCnet adds.

BankSimple expects to open by the end of 2011, TechCrunch reported.

The bank was co-founded by CEO Joshua Reich, CFO Shamir Karkal and CTO Alex Payne.

“BankSimple is designed to replace your bank, and while we focus on crafting a uniquely personal, information-rich customer experience, we rely on best-of-breed partners to provide core back-end payments and banking infrastructure,” the company said in the blog post.

TMCnet reported earlier this year, that as of March over 40,000 individuals requested a beta invite to the bank's upcoming launch.

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Ed Silverstein is a TMCnet contributor. To read more of his articles, please visit his columnist page.

Edited by Jennifer Russell
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