Canopy, which has developed a digital loan management and servicing system for banks, has raised $15.2 million in a Series A1 round, co-led by Palo Alto, Calif.-based Foundation Capital and New York City’s Infinity Ventures.
Prior investors in the Claymont, Del.-registered startup include Canaan (New York) and Homebrew (Burlingame, Calif.). TechCrunch said Canopy was valued at $50.2 million after the Series A1 round, compared with $63 million after the Series A in 2021.
Real-time Data Is Key
Mike Bivons, who worked at Baltimore agencies IMRE and Crosby Marketing, and graduated from the University of Maryland’s Robert H. Smith School of Business, and Will Hanson co-founded Canopy in 2019, after Bivons’ deeply moving personal experience with the banking system.
The trigger was a lower credit rating score, apparently caused by missed interest payments on a credit card Bivons thought he had already closed. It then occurred to Bivons that the issue had arisen because the bank’s backend system had no access to real-time data when it “closed” his credit card account. Canopy’s platform fixes that issue, and meets many emerging requirements of banks.
“From a first principles point of view, we built our platform to support the flexibility our partners and their borrowers want,” Bivons wrote in a LinkedIn post announcing the funding round. “Our partners then use our flexible rules and policy engine to launch custom products that help the niche markets they serve. From working capital to unique credit builder and branded credit card programs, our customers have harnessed the power of Canopy to scale their operations.”
Flexport and Novo, for example, used Canopy’s platform to launch and scale their commercial loan products, while Novo additionally expanded its working capital offering.
Commercial Real Estate
MacKenzie Companies
Advertising / Media / Communications / Public Relations
Nevins & Associates
Financial Services / Investment Firms
Chesapeake Corporate Advisors
Commercial Real Estate
Monday Properties
Venture Capital
Blue Delta Capital Partners
Internet / Technology
Foxtrot Media
“This year, we’ve doubled down on our API-first lending system of record that supports companies – particularly those in the commercial lending space – launching highly customized embedded financial products,” said Bivons.
This year, Canopy has launched four new products — Connect, an all-in-one workflow builder designed to help clients scale their lending programs faster; LoanLab to test new products with simulations; Preview to test impact of account changes; and SafeGuard, an audit system for clients’ lending policies.
Bivons told TechCrunch the company has gross margins above 80%, and Canopy’s software would process more than $1 billion this year. Canopy also expects to increase its annual recurring revenue by between 2.5x and 3x this year, with the goal of attaining $10 million in 15 months.
