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Digital banking startup Jiko raises $40 million

Illustration of dollar bills sticking out of a vault door.

Illustration: Megan Robinson/Axios

Jiko, an Oakland, Calif.-based startup that owns a federally regulated bank, raised $40 million in Series B financing led by Red River West.

Why it matters: As everyone hunts for yield in today's bear market, Jiko provides an attractive alternative to traditional banks by converting customer deposits into U.S. Treasury bills.

Flashback: Founded in 2016, the startup made waves in 2020 when it acquired Mid-Central National Bank, a 60-year-old regional bank headquartered in Wadena, Minn.

  • The acquisition was approved by the Office of the Comptroller of the Currency and Federal Reserve and gave Jiko a national bank charter.

Between the lines: After the Mid-Central deal, Jiko launched a consumer banking app but has since pivoted to the B2B market with its Jiko Money Storage product.

  • Unlike other banks, Jiko converts customer deposits into government-backed T-bills, giving them quick and low-cost access to yield-generating money storage with immediate liquidity.
  • Rather than rely on third-party systems, Jiko also built out its own core infrastructure for managing deposits, giving customers the ability to make real-time deposits and move money 24/7.

Of note: Other investors in the round include Trousdale Ventures, Owen Van Natta, Temaris & Associates, La Maison Partners, BPI France, Airbus Ventures, Anthem Ventures, Upfront Ventures and Radicle Impact.

  • To date, Jiko has raised $47.7 million in seed and Series A funding.
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