Grasshopper Bank raises $30 million

The digital bank Grasshopper is attracting more capital.

On Monday, the New York City company announced a $30.4 million capital raise, bringing the digital commercial bank's total funding to date to $160 million. The funding came from existing investors including Patriot Financial Partners, Endeavour Capital Advisors, FJ Capital Management and Carpenter & Co., as well as a new investor, GCP Capital Partners.

"Our strategic direction is set,” Mike Butler, Grasshopper's CEO, said in a news release. “Therefore, the new capital will further support our growth and solidify our ability to provide clients with leading-edge technology and personalized digital banking solutions across the business and innovation economies."

The bank launched in May 2019, becoming the first de novo chartered by the Office of the Comptroller of the Currency in the Northeast since the financial crisis. The goal was to bank “entrepreneurial companies and their venture capital backers,” then-CEO Judith Erwin said at the time. Butler, formerly the CEO of Radius Bank, became CEO of Grasshopper in May 2021. It now has more than $500 million of assets. 

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Up next in digital banking: What to expect

CEO Mike Butler of Grasshopper Bank surveys the landscape of fintech and discusses how new developments will affect banks and their customers.

June 25

During Butler’s tenure, Grasshopper has added three lending-oriented lines of business — commercial real estate, SBA lending, and yacht financing — as well as banking-as-a-service and small- and midsize-business banking. The company announced a suite of new technologies in March 2022, including an application programming interface layer for both direct use and in conjunction with its BaaS platform; a new core banking system; a redesigned website; and more. The number of employees grew 82% between June 2021 and June 2022.

“The companies we want to work with are the ones where the owner is the CEO, the CFO and the CMO,” Butler said when he took over Grasshopper as chief executive. “The guys that are running these businesses have a technology bias.”

In April, the bank announced that it was partnering with the digital fraud detection company FiVerity to enhance fraud prevention.

In June, Butler spoke in an interview with American Banker about forging positive relationships with bank regulators, attracting and retaining talent, and the importance of cultural alignment. 

“The cross-functional notion of how we run the company is the key to our ability to move fast,” he said at the time.