Mercury raises $200M at $550M valuation with 2.5x YoY application growth driven by AI startup boom

like a flat line on the chart. Uh absolutely Blockbuster IPO and should make for a ton of great uh takes and analysis and it'll be a fun fun day on the timeline when SpaceX goes goes public soon. We're getting the S1 any day now. Well, our next guest, Ahmad from Mercury, is here with a big funding announcement. So, we'll bring him in from the waiting room into the TBN. Amad, how are you doing?

There he is.

Yeah, great to be here. Am I not going to get the dong?

Oh, you'll get the gong, but you got to give us the news. Tell us what happened.

You got to give us

what happened.

All right. There we go.

How much did you raise?

Yeah, we just raised 200 million. Uh 550 million. There we go. TCB is leading. Uh so excited about that answer today.

That's fantastic. What was the traction that unlocked this new fundraising round? What was the catalyst?

Uh you know, we've just been kind of grinding away for the last uh what is it 7 years since we launched. Um

success seen a lot of growth in Q1 especially about 2.5x our Q1 last year in terms of applications. uh I don't know if you've seen the stats but there's been a lot of new business formation a lot of you know companies being built using AI so obviously we we hear about like these big startups in AI but there's also uh just like normal businesses being built with AI being a big catalyst u and we saw yeah big increase 2.5x over the last year which and last year was a big year for us

how are you reaching those customers like what are the key funnels that draw in these new businesses they don't exist it's hard to reach out to them before you have be very aware.

The other crazy thing for us is we most of our growth is organic. Uh but that even the percentage organic has been growing for us. So even though we're growing, we're getting more and more organic which you know uh is unexpected. Uh and the other big channel for us is LLM recommendation. So you know if you go into

your favorite LLM and you say you know what bank should I use for my startup? Uh Mercury is often the recommendation. So that's, you know, we try to deliver the best customer experience possible and, you know, because people really love Mercury, they tell their friends about it and that's for us.

What What is is like 90% of the reason that you guys are recommended so highly by LMS is just because people recommend Mercury so highly? Like I I can't be I like I I'm just trying to get at is it like your team was like, "Hey, we should really optimize this or it was just

Yeah, I think it's really hard. Like there's a whole thing called GEO which is like all about optimizing for LLMs. But at the end of the day, you know, if it's on Reddit, it's on X. Like if all the content is recommending Mercury, then that feeds into the algorithm.

Yeah, it helps to have been doing press for years. There's a huge advantage to being in business seven years. Uh not so long that you're the the articles are about the downfall or like the how you're a dinosaur.

All the coverage is that it's new and interesting and valuable and worth checking out. And so that surfaces, how are you thinking about going deeper in those LLM recommendations and sort of like the agentic commerce of actually opening an account? Is that something that's on your horizon to integrate?

It's kind of interesting thinking about like the LLMs using Mercury. So we actually launched Mercury CLI. We launched that was a month or so ago and we launched an MCP actually in December and our growth on like those is like through the roof. So you tons of people are using claw code or co-work or chat gpt to connect to mercury and then

yeah I think the well not for everyone but for a lot of people they kind of running their whole business and their life in AI now and you know if you can pull in creating an invoice or like approving a payment and it's all done within your kind of existing workflows uh that's really powerful and I think if you there's a flywheel between like if you build great tools that AI can use it actually recommends those tools even more I mean that's partly why like you people like Superbase and like those kind of tools.

Yeah. Then then how do you how do you deal with the tension of like you could build a dashboard uh visualizing uh payments that are made into a bank account over a period of time. You could also expose an API that allows me to suck out all the data and vibe code my own dashboard the way I like it. Uh there's probably demand for both. Do you just have to do both? Do you pick a lane?

I I think for us it's like do both. So we're building both kind of this CLI and we we have a whole team that's improving all the features available via the API and those those services. We also have another team that's working on and we just launched Mercury insights which you know summarizes your transactions gives you like kind of AI insights on end lets you talk to your transactions and then later this year we're launching Mercury Command where you can do kind of complex workflows like hey I just hired someone set set them up in payroll and create a card and you know do all of that without me having to kind of click around all the all of the kind of mercury surfaces. Uh and I think number one, I don't know exactly where the world's going to go, right? Like maybe maybe everyone's going to be using uh AI assistance to do everything or it's going to be a combination. So we want to service both of it. Uh and B, you know, if you think about like the gap between us and kind of these incumbent banks, you know, even whether it's like a mobile app or like searching for all your transactions, whatever is, you know, Mercury's been far ahead, but if AI keeps changing the world and like you the people's expectation of interfaces and things like that changes, we want to be at the forefront of that and you know that's going to increase the spread between like what people get from Mercury versus like what they get from the incumbents.

Yeah. I was reading an article in The Economist a couple weeks ago about uh stable coins going through a boom last year and then going through a bit of a winter or like a maybe just a you know stable uh volumes through the earlier part of this year. What are you seeing in terms of demand or tickets or usage of stable coin related features in fintech broadly?

Yeah, I think it's a lot more important on like a global basis. So I think if you're in the US and you're sending money to a US business or you can US consumer uh you know wires a all of the cards all of that works pretty smoothly. Uh if you're paying money internationally or you know you don't you know in the US and you want to have like a stable currency uh that's where USDC and these other stable coins are doing really well. So uh you know we don't currently support it natively but lots of our customers use uh you know some of these kind of stable coin services and we'll probably have uh kind of at least payment features that are based on stable coin especially for those kind of international payments where it is particularly useful. So I don't necessarily see it as a replacement for the US banking system in the US. I think it's it's more of like this kind of global connectivity layer.

Is Oh, sorry, Jordy.

Uh why why was this year the right time to get into payroll?

Uh you know, we've been expanding our services. So, obviously, we're known best for banking, but we've had a corporate credit card for three years and that's growing really fast. We have a bill pay invoicing solution and you know, over time, I really want Mercury to be the place that you do most of your business finances, right? It's kind of annoying like if if the money's here and your users are here and your finance team is here, you know, you want to have all of that kind of in in one place. Um, so yeah, we made an acquisition in payroll. We acquired a company called Central. They're running uh you know, we're continuing to run them and we're going to going to over time make it more like a fully integrated mercury payroll solution. Uh but yeah, payroll is like a big category. Uh you know, it's kind of annoying right now when you're using a payroll provider. You have to send money. it's kind of sits around for 4 days before it shows up on your employees. Uh, and you know, Central's done a really good job with kind of AI first, like they have this whole interface where you can do a ton of things in Slack and you know, we we're kind of taking some of that learning and and putting in our own kind of command launch.

Yeah. Is uh is the AI boom helping you sort of rethink uh product roadmap expansion differently than a few years ago? Like when I think about neo banks, fintech, modern technology enabled banks, I I think like you could eventually do auto loans, mortgages, consumer, you could do all sorts of the insurance. There's so many different products in the financial technology world. I know that there's incredible value to focus. At the same time, there's this foundational unlock in being able to move very quickly into new markets. How are you wrestling with that tension? Um, you know, I think number one, we want to talk to our customers and see what they really want. I don't I don't want to like invent things that they might want kind of thing. Uh, it's definitely accelerating u, you know, I think the two vectors are like a it accelerates software development. It doesn't necessarily make like

kind of the more financial like it doesn't make lending that much better faster or whatever. Uh, maybe you could underwrite a little better but uh there's still like kind of limitations but you can build software especially new software much quicker. So definitely thinking about that and like we're already seeing an acceleration in in kind of new software launches we're doing. Uh I think the other thing that's kind of interesting is you know interfaces tend to get cluttered over time but AI has a decluttering effect like you can kind of personalize it to someone's need and like you know I really think the future is people are not trying to do a specific thing but they kind of just talk about a problem. They're like hey you know I just need to make payroll like you know help me think it through kind of thing. Uh so you can go like a level above like solve the problem rather than like be like a feature uh which I think like has a decluttering effect to interfaces.

That's good.

Yeah. It's so it's so amazing. I just think back to you know 10 years ago at this point like starting to to build companies and just seeing how many things I expected to be intuitive. Like I expected my bank to be able to help me pay my employees because like the function of a bank is to like hold money and let you do things with it. And yet obviously, you know, took took some time for you guys to enter payroll and then all these all these other things like just just the concept of uh getting getting an invoice wanting to pay it. Like you really should be as simple as like dragging it somewhere and then that's it, right? And so there's all these things that like right in this moment there's going to be an entire generation of entrepreneurs that like only knows this like completely frictionless business finance. And I'm very happy for them. Uh yeah, and I'm happy for I'm happy for all of us that that had to go through and do it the hard way for for so long.

Yeah. When I started Mercury, that's actually got what got me excited that like after you build a bank account, there's so much more to do after that. You know, I really didn't want to this is my fourth company, so I really didn't want to do like this thing where you build the thing and then all you do is like incrementally improve it a little bit over like a decade. Like I really wanted to do something where like the start is just the start and it's kind of a platform to build a lot. So I'm exciting excited that we're like finally like getting to build build that kind of multi-product strategy.

Last question. Deployment pace for angel investing. Are you accelerating it? Are you decelerating? What are you doing on the investing side?

Maybe I'm a little old school, but like when I think when the valuations are the highest and the hype is the highest, you should like not accelerate. You should like, you know, we saw 2021 like I'm trying to keep like a continuous pace. Like I think it's total.

Don't you know this time is different? Yeah, I you know I think that that the like there's a reason for the hype and there's really exciting companies being built. Uh but I think it's going to be even more fun when the valuations come down after the hype dies down and you can like then deploy, you know, it was crazy no one was deploying in 2022 and 2023 when like it's the same companies