Banking-as-a-Service Provider SynapseFi Business Model

@whitesight_ © 2021 WhiteSight
Business Model Deep Dive
WhiteSight
J U N E 2 0 2 1

The (Not So) Fine Print
1
• SynapseFi is a prominent BaaS provider in the American fintech industry. It has witnessed several highs and
lows in its seven-years stint so far. As SynapseFi powers several early and growth-stage innovators in the fintech
segment, it makes for a specimen study in the banking-as-a-service category.
• This study analyses the business model of SynapseFi in relation to various ecosystem stakeholders.
• This is not a commissioned report.
• All the information mentioned in the report has been obtained through publicly available sources such as
company websites, authentic publications and public databases.
• Information relating to companies and investors is representative and not exhaustive.
• For comments and queries, please reach out to hello@whitesight.net.

@whitesight_ © 2021 WhiteSight 2
Banking-as-a-Service Models in the US
Regulated Middleware Platform Primitives
• Compliance-focused
• Bespoke
• Scale-focused
• Flexible
• Efficiency-focused
• Integrated
• Developer-focused
• Transparent
Value Proposition
Examples
1 2 3 4
BaaS provided by licensed
banks, leveraging tech
capabilities.
Tech-first infrastructure
providers with flexible bank
relationships
End-to-end BaaS providers
with in-built compliance, tech
& banking relationships.
Open source BaaS provider
with modular building blocks.
Front-end
Middleware
Back-end

@whitesight_ © 2021 WhiteSight 3
| Business Model Deep Dive

Company Overview
Investors:
White-labelled APIs for banking services
WHAT
Founded by Sankaet Pathak & Bryan Keltner
WHO
April 2014 in San Francisco, USA
WHEN
FUNDING $50.7 million up to Series B
4
‘The AWS of Banking’
Synapse is a US-based financial
technology provider of wrap-around
banking-as-a-service.
It enables companies to build and
launch feature complete deposit, credit,
and crypto products in weeks.
It provides modular building blocks to
develop and launch custom suites of
financial services to embed banking
products, issue cards, provide next
generation loans and more, quickly,
reliably and securely.
PARTNERS Back-end banks, infrastructure providers

Business Model
5
Integration Layer & Fintech Digital Channels
Core Banking APIs
BIN Sponsors
Client Infrastructure
Synapse Infrastructure
Local Bank Infrastructure
Payment Processing APIs Risk Management APIs
White-labelled Financial Products
Visa, Mastercard
ATMs, Cash Network
ACH, SWIFT, Fed
Neobank
Digital
Wallets
PFM Fintech
Payroll
Fintech
Crypto
Wallets
Digital
Lenders
Core Banking
Banking License
As a platform BaaS provider, Synapse takes care of the entire technical backend operations of financial products,
leaving the fintechs to focus and optimise customer facing interfaces.

Company Timeline
2015 2016 2017 2018 2019 2020
SynapsePay
is founded
2014 2021
Raises
$700k seed
funding
🌱
Rebrands as
SynapseFi
Evolve Bank
partnership
$17M Series A
funding
Series A
funding.
Counts
100+ clients
$33M Series B
funding from a16z
Lawsuit
against
CEO
Staff layoffs due
to COVID-19
New
executive
hires
💰
💸
⚠
🚨
💼
6
Founding team
members exit
Introduces
FDIC-insured
accounts
🏦
Since launch in 2015, Synapse has seen a favourable growth trajectory in terms of product rollout, client uptake &
supportive investors. In recent times, the company has witnessed setbacks both in business & company culture.
”
We thought instead of trying to build
out the next Simple, let's just try to
simplify the infrastructure for the next
wave of fintech companies.
”
- Synapse CEO, Sankaet Pathak

Product Stack
2015 2016 2017 2018 2019 2020
Payments
ID Auth
Payments
ID Auth
Deposit A/c
Payments
ID + Video Auth
Deposit A/c
Instant A/c Opening
Clearing A/c
Virtual Cards
Payments
ID + Video Auth
Deposit A/c
Instant A/c Opening
Clearing A/c
Virtual Cards
Debit Cards
Crypto Wallets
Card Processing
Custodial A/c
Lending
Payments
ID + Video Auth
Deposit A/c
Instant A/c Opening
Clearing A/c
Virtual Cards
Debit Cards
Crypto Wallets
Card Processing
Custodial A/c
Lending
Payments
ID + Video Auth
Deposit A/c
Instant A/c Opening
Clearing A/c
Virtual Cards
Debit Cards
Crypto Wallets
Card Processing
Custodial A/c
Lending
Chatbot
Payments
Accounts
Lending
Cryptocurrencies
Enabling Services
7
Synapse, which originally focused on
payment-as-a-service, has evolved to become
a full stack banking-as-a-service provider.

Synapse Fintech Market Map
Neobanks WealthTech Payroll PropTech Crypto Payments Others
8
Note: This list is representative and not exhaustive.

High Stakes on BaaS-Powered Neobanks
9
Investors
in..
Neobanks
building on
top of..
Banking-as-
a-Service
provider.
Retail neobanks SME neobanks

Synapse Client Base Trends
6%
38%
25%
4%
6%
4%
17%
Funding Stage of Companies Using Synapse
Pre-seed
Seed
Series A
Series B
Series C
Series D
Unfunded/ Info not available
8%
42%
19%
25%
2%
4%
Age of the Companies Using Synapse
Less than 2 years
2-4 years
4-6 years
6-8 years
8-10 years
10+ years
10
• 67% of Synapse’s clients are early stage startups (Pre-seed, Seed, Series A) with an average company age of 4
years.
• Past clients are observed to upgrade to scale-focused middleware or to insource operations as they scale.

• Switched to direct bank
partnership with nbkc
bank as user base grew
to over 600 thousand in
2020.
• Surge in fraudulent
activity that resulted in
losses for the nascent
startup.
• Switched to The
Bancorp Bank as
backend partner and
insourced banking tech
stack.
• Switched partners to
Galileo Technologies to
accommodate rapidly
growing user base.
• As of June 2021, Dave
had 10 million users.
• Plans to go public in
2021, valuing the
company at ~ $4 bn.
Clients Who Left Synapse
11
Focus on Scale
Focus on Unit Economics
Insourcing Operations Service Provider Upgrade
• Switched partners to
accommodate
expanding offerings –
deposits account &
debit card
• Partnered with
Mastercard, MetaBank
& Galileo Technologies.
• Now offers white-
labelled solutions.
Payroll Fintech
Consumer Neobank Consumer Neobank Consumer Neobank

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