This week, the online banking platform Seed sent an email to its users announcing it will be winding down its customer-facing service. Seed.co was a San Francisco-based venture-backed online banking platform for freelancers and small business owners.
After the mail went out, several customers tweeted that they hadn’t received any communication. Seed tweeted back confirming the news.
@seedbiz are you closing shop?
If not, then why did I receive an email from Bancorp that my account was being closed?
Yes. We sent an email to all of our customers yesterday, so you should have received it. If you have any questions please reach out to support.
— Seed (@seedbiz) October 31, 2018
In response to inquiries from Crunchbase News, Seed co-founder Brian Merritt said that “We’re not shutting the company down,” though he said Seed will be “shutting down our direct offering” and has notified its existing users of the impending change. “Going forward we are focused on software licensing and services for banks and non-banks,” Merritt told Crunchbase News.
Seed had raised about $5.2 million in funding during the past few years, but apparently, the money was not enough. Originally founded in 2014, the company went through Y Combinator’s accelerator program in the winter 2015 batch. Its largest venture round, some $5 million led by General Catalyst, was announced in October 2015.
Like other American digital only banks, Seed was partnering with an established banking firm The Bancorp Bank, to provide services – piggybacking off of their banking license. For startups, breaking into banking and Fintech is especially hard because of the high-level of regulations and compliance requirements.
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