- Key insight: Thread Bank attracted $30.5 million in VC funding to scale embedded banking integrations.
- Expert Quote: Cornerstone's Ron Shevlin: "Thread Bank's funding round is a vote of confidence in the embedded banking model."
- Supporting Data: Thread's embedded deposits grew ~75% from Jan 2024–Oct 2025.
Source: Bullet points generated by AI with editorial review
Thread Bank has received $30.5 million in venture capital investment that it plans to use to further its embedded banking goals.
The Nashville-based community bank, which offers embedded "digital branches" and banking services to fintech partners, announced on Tuesday that it closed a funding round consisting of a $27.6 million initial raise and a $2.9 million extension. In total, Thread Bank has raised more than $100 million in Tier 1 capital in total across multiple funding rounds.
Thread plans to use the investment to expand its embedded banking strategy, an effort that the bank has been pursuing since 2021. Portage Ventures led the funding round with participation from additional investors such as Rockmont Partners.
"Thread Bank's funding round is a vote of confidence in the embedded banking model," Cornerstone Advisors chief research officer Ron Shevlin told American Banker.
The $823 million asset bank currently manages around $2 billion in partner deposits and grew its embedded deposits by approximately 75% from January 2024 to October 2025, according to the company.
Thread has faced
In response to a request for comment, Thread Bank CEO Chris Black told American Banker that the bank includes BaaS partnerships as synonymous with embedded banking and deposits.
"We have continued to grow and mature across our business — product, data, risk and operations — in order to build the proper infrastructure [and] enable the type of scale needed to realize the significant market opportunity that is in front of Thread," Black said.
Shevlin said that previous regulatory issues surrounding BaaS, which he defines as the technical infrastructure and licensing model underpinning bank/fintech relationships, revolved around ambiguous lines of responsibility between banks and fintechs in earlier years.
"Banks were providing the license and infrastructure but weren't adequately overseeing what their fintech partners did actually with their customers," he said.
Shevlin said that embedded banking as a concept is more broad, in his view, and relates to "the integration of banking products and services into non-financial platforms where consumers already do business."
"The outlook for embedding banking products and services in vertical software-as-a-service applications, marketplaces and gig economy platforms, healthcare apps, real estate and property management apps, B2B supply chains, etc., is huge," he said. "That's what Portage Ventures and the other investors are betting on."
Thread is planning to use the funding to further develop its embedded banking goals, a focus of the bank since its rebrand. A group of investors and private equity firms recapitalized
"This funding round… serves as a resounding vote of confidence in our team, embedded approach and customer-first vision for the future of banking," Black said. "From the outset, our mission at Thread has been to use technology to meet customers where they live their financial lives and conduct their financial business."
