Grasshopper

Grasshopper provides banking services to businesses solely via a web portal and a mobile app. The company defines its target market as startups that are a part of the “innovation economy” in addition to venture capital firms that particularly invest in these companies, which the company claims is an underserved segment. The company provides all its products under its own banking license.

Products offered by the company include a bank account that enables customers to deposit money, transfer money and approve transactions. The company offers a mobile deposit feature that allows customers to deposit checks directly via the app by uploading a picture of the check. The company does not charge transaction fees or other hidden fees and does not require minimum balances. Money transfers, both domestic and international, are free of charge. In addition to this, the company offers credit cards and other lending products. The platform also enables customers to add and assign other users, which include their employees, to the bank account while maintaining control and setting limits and restrictions. Moreover, the company provides all customers with a dedicated business banker for additional support.

Grasshopper also offers a suite of products catering specifically to startups. This includes a checking account as well as access to cash management tools–like Autobooks and QuickBooks–and other business solutions.

In March 2022, the company relaunched its digital banking platform to serve the demands of SMEs, start-ups, and venture clients. The company aims to increase its client base by offering Banking as a Service (BaaS) APIs, digital deposit account opening, online and mobile banking platforms, and a new digital checking account with a Visa debit card. Grasshopper also achieved the preferred lender program (PLP) delegated authority status with the US Small Business Administration (SBA) in September 2022, which allows the bank to offer SBA-guaranteed loans using its own underwriting and servicing policies.

In addition to its core banking products, the company provides forecasting tools that enable customers to create what-if scenarios in relation to their business incomes and expenses to plan ahead and forecast any future fundraising needs.

Key customers and partnerships

In January 2023, it chose MANTL (an account origination solutions provider) to improve its digital deposit origination platform and create an automated online loan origination solution from the ground up. In addition, it partnered with nCino (an end-to-end cloud banking platform) in May 2023, to use its portfolio analytics, commercial banking, and customer engagement solutions to improve its loan portfolio management. In May 2023, Grasshopper collaborated with Sydecar, a deal execution platform for venture investors, to enable the latter’s clients to open individual hashed bank accounts as well as create investment vehicles such as special purpose vehicles (SPVs) through Grasshopper's integrated bank accounts.

Funding and financials

In August 2022, Grasshopper raised USD 30.4 million in a private equity round from existing investors such as Patriot Financial Partners and Endeavour Capital Advisors, along with notable new investor GCP Capital Partners. The company had earmarked the fresh funds to expand operations and further improve its product offerings.

As of June 2022, the company’s total assets increased by 84% YoY to over USD 500 million, while its loan and deposits improved 358% and 192% YoY, respectively. Its employee headcount had also increased 82% YoY over the same period.

In 2023, Grasshopper generated total revenue of USD 25.9 million (up 83% YoY) and had distributed loans worth USD 525.4 million.