Grasshopper Bank, a newly chartered national bank, has completed its private placement offering and the receipt of all final regulatory approvals for the bank to open for business.
The company raised approximately $116.2 million in its private placement offering, which followed an earlier seed round offering in which it raised $15 million in connection with the organization of the bank. At a combined capital raise of more than $131 million, this is believed to be the largest capital raise for a start-up bank in the U.S.
“With the approval of our national charter, Grasshopper is poised to deliver banking services custom-designed for today’s entrepreneurial companies and their venture capital backers,” said Judith Erwin, CEO of Grasshopper Bank.
The leadership team brings together executives with extensive banking, venture capital, and technology expertise. Erwin was founding executive vice president of Venture Capital Services at Square 1 Bank, from its de novo launch in 2005 to its IPO in 2014, and its ultimate sale in 2015 to Pacific Western. Her 35-year career in banking includes leadership roles at Comerica, Imperial Bank, and Plaza Bank of Commerce.
Grasshopper Bank CFO Sangeeta Kishore is former executive vice president and CFO of Metropolitan Commercial Bank. Chief Technology Officer and Co-Founder, Minerva Tantoco has held senior positions at UBS, Merrill Lynch, Fannie Mae, and served as the first chief technology officer of the City of New York. Albert Sun, chief credit officer, was most recently the CCO for East West Bank, a $40B California-based commercial bank. Chief Risk Officer Sally Myers, has extensive CRO experience, most recently with Plaza Bank. Gary Blumenthal, COO, has held senior positions at UBS and Morgan Stanley.
Grasshopper Bank becomes the first bank chartered by the Office of the Comptroller of the Currency in the Northeast in more than 10 years, the ninth bank to receive a charter since the 2008 financial crisis, and the first commercial bank that plans to fully utilize digital banking in the commercial banking space.
Grasshopper Bank opened for business on May 13, 2019 to a select group of entrepreneurs and venture investors, with a broader rollout of its services planned in the coming months. Grasshopper Bank is one of a limited number of commercial banks focused on the innovation economy as its primary market. Grasshopper brings to this market a state-of-the-art delivery platform that aims to surpass the types of delivery systems utilized by existing banks serving its target market.
“Traditional banks, limited by antiquated and burdensome legacy systems, are less equipped to meet the needs of early stage companies,” Erwin said. “Their business models and infrastructure do not position them to provide products and services for today’s digital entrepreneur at affordable prices, or to take advantage of new technologies around data, security, and user-friendly access. In contrast, Grasshopper Bank will act as a partner with entrepreneurial companies, delivering digitally-driven, streamlined services that give management teams more efficient command of day-to-day financial operations.”
Lead investors in the Company’s private placement offering included Patriot Financial Partners III, funds and accounts advised by T. Rowe Price Associates, Endeavour Capital Advisors, funds managed and advised by FJ Capital Management and Hamilton Lane Advisors, on behalf of New York State Common Retirement Fund
Keefe, Bruyette & Woods, A Stifel company and Seapower Carpenter Capital, acted as co-placement agents for the offering and financial advisors to Grasshopper. Kilpatrick Townsend & Stockton acted as legal counsel for Grasshopper in connection with the bank charter and the offering. Squire Patton Boggs (U.S.) acted as legal counsel for Keefe, Bruyette & Woods as placement agent.
Based in New York City, Grasshopper Bank is a national bank offering a full array of commercial banking products to innovation economy companies and the venture capital firms that fund such companies.