Silicon Valley Bank Competitors: Top Alternatives for Startups in 2024
Driven by our experience as CPAs to 800+ startups working within scores of Silicon Valley Competitors, thousands of conversations with founders about their banking experiences and meetings with 20+ banks, we list out the top SVB alternatives in 2024.
Kruze’s startup clients collectively manage billions of dollars across the top startup banks, giving us a unique view into the top Silicon Valley Bank competitors. Use our comparison tools to find SVB alternatives, and watch our videos by experienced startup CFOs and accountants to understand what founders should look for in their banking stack.
In the wake of the 2023 banking crisis, the landscape for startup banking has dramatically shifted. As a result, founders are now more focused than ever on finding safe, reliable, and feature-rich banking partners. This article explores the top Silicon Valley Bank competitors and alternatives, providing insights to help startups make informed decisions about their financial partners in 2024. You can also read our entire report on the best banks for startups, which includes market share reports and pros and cons for a dozen plus Silicon Valley Bank alternatives.
Silicon Valley Bank and the changing face of startup banking
The failure of Silicon Valley Bank (SVB) in early 2023 sent shockwaves through the startup ecosystem, prompting a reevaluation of banking practices among founders and venture capitalists alike. This event highlighted the importance of diversification and the need for robust, tech-savvy banking solutions tailored to the unique needs of startups.
As we navigate the post-SVB landscape, several key players have emerged as strong alternatives, each offering distinct advantages for startup founders. Let’s explore these options and the factors you should consider when choosing a bank account for your startup. We’ll also provide market share numbers for these banks - keep in mind that the median startup now has two different banking relationships, so the total market share will add up to well over 100%! Kruze is a partner of several of the companies mentioned on this review, and if you use our link to sign up you may get a sign up bonus and we may receive a referral fee. Our executives may also own stock in public and private companies that we mention.
Comparing Silicon Valley Bank alternatives
Some of these are not technically banks, but have an underlying relationship with a bank. We encourage you to perform your own diligence on any financial institution before you establish a relationship.
Click on the logo to add or remove providers from the comparison chart.
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| Online interface | Good | Fair | Fair | Good | Good | Good | Good | Good | Fair | Great | Great | Great | Good | Good |
| Branch offices | No | Yes | Yes | No | Yes | Yes | Yes | Yes | Yes | No | No | No | Yes | No |
| Customer service | Phone, Email | Phone, Email, Online | Phone, Email | Email, Live Chat | Phone, Email, Dedicated Banker | Phone, Email | Phone | Phone, Email, Online, Live Chat | Phone, Email, Online | Live Chat | Email, Online | Email, Online | Phone, Email, Online | Email, Live Chat |
| QBO integration | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Loans or lines of credit | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | No | Yes | Not sure |
| Extended FDIC protection | Yes | Yes | Yes | Yes | Yes | Yes | Yes | No | Yes | Yes | Yes | Yes | Yes | Yes |
| Cash management services/products | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
Top Silicon Valley Bank competitors for startups
1. JPMorgan Chase
JPMorgan Chase has emerged as a dominant force in the startup banking sector, attracting over 60% of startups in the immediate aftermath of the SVB crisis. During the banking crisis, JPMorgan stepped up and supported founders with a rapid onboarding process. They have a great reputation for stability, this has made it a go-to choice for many founders.
Key features for Chase business checking customers:
- Strong reputation for stability and security as a financial institution
- Robust online banking and mobile banking platforms
- Extensive network of physical branches and ATMs
- Comprehensive suite of business banking services, including treasury
Downsides to JPM is that it’s harder to open an account than you’d hope - if you get into the tech banking group, they’ll set you up! But if you walk into a random branch you may end up with a small business account that doesn’t quite work for a funded startup. It also takes a phone call to get many things done at JPM, which can be annoying for some tech founders.
While JPMorgan Chase has seen slight erosion in market share in Q4 2023, it remains a top choice for startups seeking a well-established, stable banking partner.
2. Mercury
Mercury, a financial technology company (not actually a bank), has demonstrated substantial growth in both customer base and deposit share. This online fintech has gained popularity among tech companies due to its easy account opening process and robust fintech integrations. It’s become one of the main go-to choices in Silicon Valley and beyond for tech startups.
Key features:
- User-friendly digital banking interface
- No minimum balance requirements or monthly fees
- Integrated tools for financial management and analysis
- Easy treasury options
- FDIC insurance up to $5 million through partner banks
The primary downside is that Mercury is not technically a bank - Mercury partners with FDIC insured banks to offer its banking products and services. Mercury has no physical branches, which isn’t a big deal for most founders, given how great its mobile banking is.
Nearly 40% of new startups have chosen Mercury, entrusting the bank with over half of their cash. Its appeal lies in its modern approach to banking and its focus on serving the unique needs of tech startups.
3. Brex
Leveraging its existing relationships through corporate card services, Brex has successfully expanded into cash management solutions for startups. Like Mercury, it’s not technically a bank, instead offering its services through partner banks. During the SVB crisis, because so many startups had a corporate card with Brex, they were able to gain significant share in the bank-like services market - nearly 30% of Kruze clients now store some or most of their cash with Brex. The company has solidified its position as a key player, especially among newly incorporated startups.
Key features:
- Integrated banking solutions and corporate card offerings
- Cash management accounts with FDIC insurance through partner banks
- Rewards program tailored for small business owners
- Great expense management tools
- Solid UX
- Advanced expense management tools
Brex’s all-in-one financial platform approach has resonated with many startup founders looking for comprehensive business banking services. The biggest downside is that it’s not a bank, and you basically need to use their corporate card solutions to get their cash management solutions.
4. HSBC
HSBC has been making moves to capture a share of the startup banking market by hiring experienced tech bankers from SVB and FRB (another casualty of the SVB crisis, unfortunately). While they’re still developing their startup-focused offerings, HSBC’s global presence and financial stability make them a potential contender.
Key features:
- Global banking network
- Extensive range of financial products
- Increasing focus on tech and startup banking
- Good choice if operating internationally, including features like good foreign currency exchange, etc.
The downsides are that it’s a big bank and can move a bit more slowly; however, we are hopeful that the solid tech bankers that they’ve hired will solve these issues for our clients. And the international presence is great.
5. Arc
Arc is a fintech company that has gained traction in the startup banking space. While not technically a bank, it offers a range of services tailored to startups, from a cash management account to higher-yield solutions for excess cash. They’ve recently added a deep venture debt marketplace, which we did a podcast on.
Key features:
- Strong online interface
- Responsive customer service via phone and email
- Innovative venture debt marketplace
- Extended FDIC protection through Arc Gold
- Cash management services and products
The main downsides of Arc are that it’s not a traditional bank, has no physical branches, and is a relatively new player in the market. As a startup itself, it may not offer all the services that traditional banks do.
6. Bank of America
Bank of America is a large, established financial institution that has been making efforts to cater to the startup market. Despite its stability, it hasn’t gained much market share among startups - mainly because it’s hard to open an account, and their bankers don’t really get tech startups all that well.
Key features:
- Extensive network of branch offices and ATMs
- Integrates with QuickBooks Online
- FDIC insurance and brokerage options
- Trusted, large financial institution
However, Bank of America has some drawbacks for startups. Most of their bankers don’t fully understand the unique needs of startups, and their customer service can be hit or miss. They’re not particularly focused on early-stage companies, and many of their account offerings may not be a good fit for startups.
7. Bridge Bank
Bridge Bank has positioned itself as a strong contender in the startup banking space, with a deep understanding of the tech industry’s needs. They’ve brought on experienced tech relationship managers, and have a pretty good suite of products for high-growth small businesses and startups.
Key features:
- Top-tier relationship managers/bankers who understand startups
- Offers venture debt and lines of credit
- Strong FDIC insurance options
- Robust cash management services and products
The main drawbacks of Bridge Bank are its limited geographic footprint with branch offices and a potentially less sleek online interface compared to some fintech competitors. Their relationship-based approach may not suit all founders; they do try to chat on the phone with you!
8. Meow
Meow is another fintech company entering the startup banking space, offering modern banking solutions - although it’s not technically a bank. They tend to appeal to founders who like online and mobile banking and UX.
Key features:
- Good online interface
- Integrates with QuickBooks Online
- Offers FDIC insurance extension through partner banks
- Cash management services and products
- Understands startup needs
Like Arc, Meow is not technically a bank and doesn’t have physical branches. As a new player and a startup itself, it may not offer all the services that traditional banks do.
9. Rho
Rho is a fintech company that has been gaining attention in the startup banking world. It’s not technically a bank, instead providing banking services through partnerships with FDIC insured banks. The company offers solid options to SMBs, mid-market companies and startups. We particularly like their cash management/treasury tools.
Key features:
- Intuitive online interface
- Responsive customer service via email and online channels
- Integration with QuickBooks Online
- Competitive interest rates
- Extended FDIC protection across all deposits
- Accounts payable solution to streamline vendor payments
The main drawbacks of Rho are similar to other fintech options - it’s not technically a bank, has no physical branches, and is a relatively new player in the market.
10. Citizens Bank
Not to be confused with First Citizens, the bank that bought Silicon Valley Bank, Citizens is actively investing in growing its startup banking practice. This includes sponsoring a number of tech events, and building out a dedicated Technology & Communications team.
Key features:
- Branch offices
- Some quite good technology bankers
- Integrates with QuickBooks Online
- Offers venture debt loans and lines of credit to startups
- Insured Cash Sweep for extended FDIC protection
They are still trying to grow market share, and won’t have as slick of a online user interface as Mercury or some of the very tech forward banks.
Where is SVB now?
Despite the crisis, SVB has managed to retain some market share, primarily among existing clients. About half of startups still have a funded account with Silicon Valley Bank. However, newly incorporated startups are less likely to choose SVB as their primary banking partner.
Key features:
- Extensive experience in serving the startup ecosystem with great bankers
- Specialized products for venture-backed companies
- Strong network within the VC community
- Rodust startup banking solutions, including treasury and venture debt offerings
We’ve met with quite a few SVB bankers in the past year, and they are still hustling, helping founders, getting debt for startups, etc. The acquisition by First Citizens seems to have been well executed, so we would encourage founders to talk to them.
SVB / First Citizens pros and cons:
Given the significant role Silicon Valley Bank (SVB) has played in the startup ecosystem, and its recent acquisition by First Citizens, it’s worth considering its pros and cons separately:
Pros:
- Extensive experience with startups and venture capital
- Branch offices for in-person service
- Relationship-based approach with dedicated startup bankers
- Offers loans and lines of credit to startups
- Cash management services and products
Cons:
- Acquisition by First Citizens may lead to changes
- Branch offices primarily located in tech hubs, not nationwide
- Not as sleek an online interface as some fintech competitors
- Relationship-based approach may not suit all founders
Essential business banking services to look for in an SVB alternative
When evaluating Silicon Valley Bank alternatives, founders of VC-backed startups should look for financial institutions that offer specialized business banking services tailored to startups. You’d be amazed at how many big banks (and small ones as well) don’t get startups! Here are the key services and factors to consider:
- Financial Stability: Choose a safe and well-capitalized bank to ensure the security of your funds.
- Online and Mobile Banking: Prioritize strong online platforms and mobile apps with intuitive interfaces for efficient account management and tracking of business expenses.
- Customer Service: Seek banks offering reliable, accessible support from representatives who understand the startup ecosystem.
- Fee Structure: Look for low to no fee banking on business checking accounts and other essential services.
- Startup Expertise: The bank should have a deep understanding of startup finances and the tech market.
- Software Integration: Ensure seamless integration with popular business software like QuickBooks for streamlined accounting.
- Extended Deposit Insurance: Look for features like insured sweep accounts that offer protection beyond standard FDIC limits for your operating funds.
- Cash Management Solutions: Seek access to investment products such as short-term government mutual funds to optimize cash flow and maximize returns on idle funds.
- Tech-Focused Products: A full range of startup-specific offerings including credit cards, venture debt options, and a dedicated VC relationship team.
- Foreign Currency Services: For startups with international operations, efficient foreign currency exchange services are crucial.
- Payment Processing: Competitive rates on credit card payment processing for efficient revenue collection.
- Savings Options: High-yield savings accounts for better cash management.
- Lending Facilities: Access to various forms of credit, including lines of credit and venture debt.
- Scalability: Banking solutions that can grow with your startup, from early stage to maturity.
- Security Measures: Advanced fraud protection and cybersecurity features to safeguard your business accounts.
By carefully evaluating these business banking services and factors, startup founders can select a financial institution that not only protects their funds but also provides the specialized solutions necessary to support their unique business needs and fuel growth in the competitive tech landscape.
Remember, the right banking partner should act as more than just a place to store money – it should be a strategic ally in your startup’s journey.
How many banks should a startup use?
In the post-SVB landscape, diversification has become a key strategy for startups. Our analysis shows that the median startup now uses two banks, up from just one before the Silicon Valley Bank crisis. This shift reflects a growing awareness of the importance of spreading risk and ensuring access to funds across multiple business bank accounts.
While using multiple banks can provide added security, it’s important to balance this with the complexity of managing multiple accounts. For most startups, maintaining relationships with two to three banks is likely sufficient to mitigate risk while keeping financial management manageable.
Another item to consider when working with multiple banking partners - especially the fintech players who partner with third party banks to get FDIC insurance (and extended FDIC insurance) is to make sure that if your startup isn’t using the same underlying banks. FDIC insurance is complicated, but essentially a company only gets $250,000 in coverage for each bank that it works with, so there isn’t an advantage of having multiple accounts originated by the same fintech player heading into the same bank.
The role of venture debt in startup banking
Venture debt has emerged as a competitive edge for some banks in attracting startup deposits. This form of financing can be an attractive option for startups looking to extend their runway without diluting equity.
When considering a banking partner, it’s worth exploring their venture debt offerings and understanding how these products might fit into your startup’s financial strategy. Banks categorized as “Other” in our analysis have effectively used venture debt offerings to attract new startup clients.
The importance of technology in startup banking
Modern startups prefer financial partners that offer cutting-edge, accessible banking solutions. Banks with legacy systems face significant challenges in attracting tech-savvy founders who expect seamless digital experiences.
Key technological features to look for in business banking services include:
- User-friendly mobile banking apps
- Robust API integrations - especially into accounting software
- Real-time transaction monitoring
- Advanced fraud protection measures
- Automated reconciliation tools
- Seamless integration of credit card payments and merchant services
Fintech or traditional bank - which should you choose?
As a startup founder, selecting the right business bank account is crucial. The choice between a traditional financial institution and a financial technology company for your banking services can significantly impact your operations. Let’s explore the strengths of each option to help you make an informed decision for your tech company.
Traditional Banks:
- Established Reputation: Long-standing financial institutions often provide a sense of security for your business accounts.
- Comprehensive Banking Services: Offer a wide range of services, from checking and savings accounts to loans.
- Physical Presence: Branch networks can be beneficial for complex banking solutions or face-to-face advice.
- Robust Deposit Insurance: Typically offer standard FDIC insurance for peace of mind.
Fintech Companies:
- Innovative Banking Solutions: Often at the forefront of technological advancements in business banking services.
- Enhanced Mobile Banking: Generally offer more intuitive, user-friendly interfaces and feature-rich mobile apps.
- Tech-Focused: Many specialize in serving tech companies, offering tailored products and services.
- Seamless Integrations: Usually provide easy integration with other financial management tools.
- Efficient Credit Card Payments: Often offer streamlined processing and competitive rates for credit card transactions.
Considerations:
- Cash Flow Management: How complex are your cash flow needs? Fintechs often offer advanced tools for monitoring and optimizing cash flow.
- Savings Options: Compare the interest rates and terms for business savings accounts across both types of institutions.
- International Banking: If you’re operating globally, consider which option provides better foreign currency exchange services.
- Tech Integration: If seamless integration with your existing tech stack is crucial, a fintech might have an edge.
- Customer Support: Consider the level and type of support you need, whether it’s in-person meetings or digital-only communication.
The hybrid approach: Many of our clients at Kruze Consulting have found that a hybrid approach works best. They maintain business bank accounts with both a traditional bank and a fintech company, leveraging the strengths of each.
For example:
- A traditional bank account might be used for core banking services, large transactions, and as a trusted name for stakeholders.
- A fintech account could be utilized for day-to-day operations, taking advantage of advanced cash management tools, seamless software integrations, and often more competitive rates on basic banking services.
This dual approach allows startups to benefit from the stability and comprehensive services of traditional financial institutions while also enjoying the innovation and startup-focused features of fintech platforms. We’ve observed that many of our clients find success in using both: maintaining an account with a traditional bank for certain services, while also leveraging a fintech player like Mercury or Brex for others. This balanced approach allows them to maximize the benefits of both worlds, ensuring they have access to a full range of banking solutions tailored to their unique needs as a growing tech company.
Ultimately, there’s no one-size-fits-all answer to whether a traditional bank or a fintech is better for your startup’s banking needs. Your choice should depend on your specific requirements, growth stage, and operational needs. By considering a hybrid approach, you can potentially get the best of both worlds and create a banking strategy that fully supports your startup’s growth and financial management needs.
Conclusion: Navigating the new startup banking landscape
The collapse of Silicon Valley Bank has reshaped the startup banking landscape, emphasizing the importance of diversification, technological innovation, and tailored financial services for early-stage companies. As we move forward in 2024, startups have more options than ever when it comes to choosing a banking partner.
Whether you opt for an established player like JPMorgan Chase, a digital-first solution like Mercury, or a comprehensive financial platform like Brex, the key is to choose a partner that aligns with your startup’s unique needs and growth trajectory. Consider factors such as financial stability, tech integration, startup-specific products, and customer service when making your decision.
Remember, thebest business banks for startups are those that not only safeguard your funds but also provide the tools and support necessary for your company’s growth. Additionally, as you navigate post-crisis banking, it’s worth exploringhow venture debt has evolved in this new landscape.
By staying informed about your options and carefully evaluating potential banking partners, you can ensure that your startup’s financial foundation is as solid and growth-oriented as possible in the dynamic world of tech startups.
Appendix: What happened to Silicon Valley Bank?
Silicon Valley Bank (SVB) collapsed in March 2023 due to a combination of factors, including a mismatch between its assets and liabilities, a high concentration of deposits from the tech sector, and a bank run triggered by fears about its financial stability. The bank’s failure was the largest since the 2008 financial crisis and sent shockwaves through the startup and venture capital ecosystem.
Kruze’s phones were ringing off the hooks as the SVB crisis unfolded, and our clients moved over one billion dollars in just a few days.
Again, the good news is that they were acquired by First Citizens, a well-respected bank that has a history of successfully acquiring other banks.
Key points about the SVB collapse:
- SVB was heavily invested in long-term government bonds, which lost value as interest rates rose
- A high proportion of SVB’s deposits were uninsured, leading to a rapid withdrawal of funds when concerns about the bank’s stability spread
- The bank’s collapse led to a temporary freeze on many startups’ access to their funds
- The FDIC stepped in to guarantee all deposits, even those above the typical $250,000 insurance limit
- The event prompted increased scrutiny of bank risk management practices and led many startups to diversify their banking relationships
In the aftermath, SVB was acquired by First Citizens Bank. In our opinion, after the messiness of the crisis, the new ownership is working hard to restore SVB to its prior position. Silicon Valley Bank’s team and solution set continue to be excellent for funded startups, and despite the large number of solid competitors, it’s worth looking into them as your banking solution.
Here is how we remember the crisis happening:
Order of Events
- March 8: SVB announced a $1.8 billion loss on the sale of securities and planed to raise capital.
- March 9: A bank run began as depositors rushed to withdraw their funds. VCs were advising founders to move their money out of the bank - and we were getting frantic calls as founders tried to open a new bank account.
- March 10:
- California regulators closed SVB.
- The FDIC was appointed as receiver.
- FDIC initially announced that insured depositors would have access to their funds by March 13.
- Our clients were concerned because they needed to make payroll!
- March 12:
- The U.S. Treasury, Federal Reserve, and FDIC jointly announced that all depositors of SVB would be fully protected.
- A “systemic risk exception” was invoked to protect all deposits.
- March 13:
- The FDIC created the Deposit Insurance National Bank of Santa Clara (DINB).
- All depositors were given full access to their funds, eliminating the need for future dividend payments to depositors.
- March 27: First Citizens Bank agreed to purchase substantially all deposits and loans of SVB from the FDIC.
- March 27 onwards:
- The FDIC received equity appreciation rights in First Citizens stock, potentially worth up to $500 million.
- This arrangement replaced traditional dividend payments with a mechanism for the FDIC to recover funds over time.
- May:
- The FDIC proposed a special assessment on banks to recover the costs of protecting uninsured depositors.
- This move was aimed at replenishing the Deposit Insurance Fund, serving as an alternative to traditional dividend payments.
- Ongoing:
- The FDIC continues to sell remaining assets from SVB to recover additional funds.
- Any excess funds recovered are returned to the Deposit Insurance Fund, indirectly benefiting the banking system.
- This ongoing process of asset sales and fund recovery replaces the concept of future dividend payments to individual depositors.
