New York, NY - Aug 06, 2025 (UTC) - Grasshopper Bank, a New York-based digital bank founded in 2019, announced, that it has raised $46.6 million in a funding round led by Patriot Financial Partners LP, with participation from Glendon Capital Management. Following a $30.4 million round in 2022 and a $116 million private placement in 2019, total funding exceeds $256 million. The capital supported the bank’s April 2025 merger with Auto Club Trust, FSB, expanding its reach to 13.8 million AAA members across 13 states. With $1.4 billion in assets, Grasshopper is enhancing its client-first digital platform to deliver tailored banking solutions for small businesses, startups, venture capital firms, and fintechs, while introducing new consumer offerings in the $50 billion digital banking market.
Funding Details
The $46.6 million round, led by Patriot Financial Partners, builds on Grasshopper’s 53% asset growth to $1.33 billion, 81% deposit growth to $2.37 billion, and 49% loan growth to $961.8 million by June 30, 2025, compared to December 2024. The funds will support:
- Platform Expansion: Enhancing digital tools and consumer banking offerings, including white-labeled solutions for affinity partners.
- Technology Investments: Deploying Agentic AI for back-office automation by late 2025.
- Market Growth: Scaling Banking-as-a-Service (BaaS) partnerships with brands and fintechs.
- Team Strengthening: Adding board members like James Fitzgerald, former CFO of Eastern Bank.
| Funding Round | Amount | Year | Lead Investors | Supporting Investors |
|---|---|---|---|---|
| Private Placement | $116M | 2019 | Not disclosed | Not disclosed |
| Unattributed | $30.4M | 2022 | Patriot Financial Partners | Endeavour Capital Advisors, FJ Capital Management, Carpenter & Company, GCP Capital Partners |
| Unattributed | $46.6M | 2025 | Patriot Financial Partners | Glendon Capital Management |
| Total Raised | $256M+ | – | – | – |
CEO Mike Butler stated, “Our vision is to redefine digital banking for entrepreneurs, businesses, and consumers. This funding and our Auto Club partnership position us to deliver a more inclusive banking experience.”
Grasshopper’s Technology and Services
Grasshopper’s platform offers tailored banking solutions, including:
- Banking-as-a-Service (BaaS): Powers fintechs with commercial API platforms, partnering with firms like Treasure Financial.
- Small Business and Startup Banking: Provides digital checking, rewards debit cards, and QuickBooks integrations.
- Lending Solutions: Includes SBA lending, commercial real estate, and yacht financing, with $961.8 million in loans.
- Digital Tools: Supports mobile check deposits, ACH payments, and customizable workflows.
Rebuilt in 2022 with a new core banking system and API middleware, the platform ensures security and scalability. Plans for Agentic AI in late 2025 will enhance automation.
Leadership and Expertise
Led by CEO Mike Butler (ex-Radius Bank), with CFO Sangeeta Kishore, CTO Minerva Tantoco, and Chief Credit Officer Albert Sun, Grasshopper’s team combines banking and technology expertise. New board member James Fitzgerald, who grew Eastern Bank’s assets from $8 billion to $25 billion, strengthens strategic oversight.
Industry Impact and Challenges
The $50 billion digital banking market demands tailored, efficient solutions. Grasshopper’s BaaS platform and lending solutions have driven 3x deposit growth since 2022, with the Auto Club merger expanding its consumer reach. Challenges include regulatory scrutiny in BaaS and competition from neobanks like Mercury. Grasshopper addresses these with FDIC-compliant infrastructure and industry-specific offerings.
Stakeholder Perspectives
Butler told American Banker, “The Auto Club deal opens doors to 13.8 million AAA customers, a model for future brand partnerships.” A Patriot Financial Partners representative said, “Grasshopper’s innovative platform is a standout in digital banking.”
Future Outlook
Grasshopper plans to launch consumer products in 2026 and deploy Agentic AI by late 2025, targeting 10,000 business clients and $3 billion in assets by 2028. Strategic BaaS partnerships will drive growth in the digital banking market.
Source : Grasshopper
