Founders: Jacqueline Reses (CEO), Erica Khalili, Homam Maalouf, Ronak Vyas
Launched: 2021
Headquarters: Kansas City, Missouri
Funding: $100 million
Valuation: $750 million
Key technologies: N/A
Industry: Fintech
Previous appearances on Disruptor 50 List: 0
Traditional banks and fintech firms aren’t the only ones offering financial services these days. A coffee shop can offer one-click payments; an online furniture shop might have a buy now, pay later option at checkout; an electronics vendor can offer insurance on the product they’re selling. All this is made possible through embedded finance, which allows businesses to integrate payments, lending or insurance with whatever product or service they usually sell.
Embedded finance blurs the lines between banks and non-banks. It’s in this space that Lead Bank is operating. Lead is a state-chartered bank that offers business and personal banking services as well as a banking-as-a-service platform. A BaaS platform has all the behind-the-scenes infrastructure, like APIs, that enable non-banks to provide banking services.
Its started in 2021 when Jackie Reses, now CEO, led a group of investors in the acquisition of the company. Reses, who previously headed Square Capital and was chief development officer at Yahoo, had a vision for Lead to help non-bank businesses, such as tech startups and small businesses, offer financial services in various situations and apps.
Under Reses, Lead has become one of the largest female-owned banks in the US, with approximately $1.1 billion in assets. The company works with fintechs such as Affirm (where she serves on the board), fellow Disruptor Ramp, Self, Flex, CreditKey and Point. For now, most of Lead’s fintech business involves helping companies offer loans, issue credit or debit cards or provide bank accounts. Eventually, the company would like to expand more in helping companies provide payment options.
Reses, who was named to CNBC’s Changemakers list earlier this year, recently told CNBC, “Most people don’t realize that fintechs operate on the rails of the banking system. That keeps us all safe and sound because the regulations around banking have been established for 100 years now.”
But she added that many banks that started to get into business with fintechs in recent years were “really out over their skis. … They cropped up, they built a partnership … you have these mass consumer companies in fintech that have aggregated tens of millions of customers with bank infrastructure underneath that is not fit for the scale and velocity of the transactions happening.”
The company has some high-profile investors from the old guard of finance, including Larry Fink, BlackRock CEO, and Larry Summers, former Treasury Secretary.
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