Digital banking startup Jiko raises $40 million
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.