Technology

CapStack Co-Founder Secures $6 Million to Develop Bank-to-Bank Marketplace for Portfolio Diversification

ChainVerse January 7, 2025

Table of Contents

A New Era in Banking: Integrating Operating Systems for a Broader Reach

Michal Cieplinski, co-founder of Pipe and a former executive at Fundbox and LendingClub, has formed a new startup called CapStack with Tzvika Perelmuter. The company’s mission is to create an integrated operating system for banks, enabling them to share and have visibility into one another’s portfolios. This innovative concept aims to break down the barriers between institutions, fostering connectivity and diversifying capital sources.

A Visionary Approach to Banking

Cieplinski’s vision for CapStack revolves around addressing a pressing issue in the banking sector – the lack of connection between institutions. "Something I saw is that banks are islands," he told TechCrunch in an interview. "Each bank operates on its own and there is no connectivity…And they’re all searching for an ability to diversify capital sources."

By creating a platform that allows banks to share portfolios, loan origination, and deposit management, CapStack seeks to mitigate risks associated with over-concentration of assets. This approach not only benefits small and mid-sized banks but also larger financial institutions.

Raising Capital Amidst Market Uncertainty

The startup managed to raise $6 million in a short span, with Fin Capital leading the round and several prominent venture capital firms participating. This feat is all the more impressive considering the funding was secured almost immediately after launching the company and right before the meltdown of Silicon Valley Bank – pre-revenue and pre-product.

Addressing Geographical Limitations

Cieplinski emphasizes that small and mid-sized banks are limited by their geographical footprint, with most customers residing near a bank branch. "We don’t necessarily realize how serious that is," he said. "Especially because small and mid-sized banks are not investment banks – they don’t get money other than deposits."

A Comprehensive Solution

CapStack aims to provide a comprehensive solution for financial institutions by giving them the ability to:

Host loans on the platform originated by their institution
Allow other banks to participate in those loans
Manage deposits more effectively

This integrated operating system is poised to revolutionize the banking industry, enabling institutions to collaborate and reduce risks.

A Bright Future Ahead

With a strong foundation and a talented team behind it, CapStack is well-positioned to make a significant impact on the financial sector. As Cieplinski’s vision comes to life, we can expect to see a more connected and efficient banking system emerge.

About the Author

Mary Ann Azevedo has over 20 years of experience in business reporting and editing for various publications, including FinLedger, Crunchbase News, Crain, Forbes, and Silicon Valley Business Journal. She holds a Master’s degree in journalism from the University of Texas in Austin.