Grasshopper Bank Raises $30.4M to Expand BaaS and SMB Lending

Grasshopper Bank, a digital commercial bank headquartered in New York City, announced a $30.4 million capital raise in August 2022, lifting its total funding to $160 million. The round was primarily backed by existing investors Patriot Financial Partners, Endeavour Capital Advisors, FJ Capital Management, and Carpenter & Company, with new participation from GCP Capital Partners. The funding is earmarked for Grasshopper's push into SMB lending and its nascent Banking-as-a-Service business.

The bank's first BaaS partnership is with Treasure Financial, a cash-management fintech, described as the initial step in a planned series of similar deals. Grasshopper positions itself as a digital-first commercial bank serving innovation-economy companies and fintechs through its BaaS platform. The raise signals growing investor confidence in the bank's ability to serve as infrastructure for embedded finance use cases.

Financial terms beyond the headline amount were not disclosed. The deal underscores continued interest in BaaS sponsor banks even as the broader fintech funding environment cooled in mid-2022.