Pipe-Backed Fintech CapStack Raises $6m to Derisk Bank Portfolios

Fintech CapStack, co-founded by Pipe’s Michal Cieplinski, raised $6 million in pre-seed funding to help it create “the first integrated operating system for banks.’’

The funding, led by Fin Capital, was oversubscribed and with participation from Alloy Labs, Cambrian Ventures, Future Perfect Ventures, Gaingels, Selah Venutres, Uncorrelated Ventures, and Valor Equity Partners, the company said in a release.

“CapStack is the first integrated operating system for banks,” said Jillian Williams at Cowboy Ventures. “It’s the solution banks have been waiting for.”

Today is Day 0 at @CapStackTech – Today we start building the first integrated operating system for the banking industry enabling seamless cooperation between banks. Today we connect banks and build the largest financial services infrastructure company!https://t.co/TMiN9fs3OK

— Michal Cieplinski (@m_cieplinski) July 12, 2023

More than 60 banks joined the platform before a single line of code was written or any staff hired, Cieplinkski told TechCrunch in an interview.

A FinTech Startup to ‘Deriskify’ Portfolios

In the TechCrunch interview, Cieplinski said CapStack is the “first bank-to-bank marketplace’’ that will enable financial institutions to have visibility into each other’s portfolios. The platform will give financial institutions a way to invest deposits and loans and ‘’de-riskify their portfolios,’’ he said in the interview.

Cieplinski co-founded CapStack in March with Tzvika Perelmuter, as chief technology officer. Perelmuter was former R&D chief at Fundbox.

Logan Allin, founder and managing partner at Fin Capital, has joined CapStack’s board, and said banks ‘’absolutely need an upgrade’’ to restore confidence for customers, regulators, and other stakeholders.

“CapStack has the opportunity to dramatically improve solutions for bank risk management at a critical time for the stability of our country’s banking infrastructure,” he said.

Before CapStack, Cieplinski co-founded Pipe, a global trading platform for recurring revenue streams, and was senior vice president at Lending Club, one of the biggest publicly-traded fintech lenders, and a co-founder of Fundbox, a B2B fintech lender.

Pipe made startling headlines late last year when its three founders, including Cieplinski stepped down, saying they need an experienced CEO to take the reins. The firm, which had raised more than $300 million and was valued at as much as $2 billion,

Pipe, which had raised more than $300 million in funding and was once valued at $2 billion, faced anonymous allegations of misusing capital that were denied by the company.

Cieplinski told TechCrunch he’s targeting the fourth quarter or first quarter next year to beta test the CapStack platform.

“Everyone was aware of the situation with Silicon Valley Bank — it was too focused on certain assets,” he said. “All the banks looking to join the platform are also overly concentrated in some assets — some have excessive deposits and don’t know how to use them, but they must offer returns to their depositors and customers.”

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