May 20 (Reuters) - Mercury said on Wednesday it had raised $200 million at a $5.2 billion valuation in its latest funding round, led by investment firm TCV, as it seeks to attract AI-native founders and businesses as banking clients.
Global venture funding has remained strong in recent quarters, with a sizable portion directed toward companies integrating AI with their operations, as investors anticipate solid exit opportunities.
Existing investors including Andreessen Horowitz, Coatue, CRV, Sapphire Ventures, Sequoia Capital and Spark Capital participated in Mercury's latest round.
The company's co-founder and CEO Immad Akhund said AI was helping companies narrow the gap between ideas and viable businesses, creating opportunities for Mercury to compete in a market dominated by legacy banks.
It operates through partner banks and does not have its own charter, the introduction of which would allow it to integrate Zelle, a digital payments network, enabling Mercury to offer a comprehensive banking solution for its core user base of founders and startups.
The company received conditional approval in April from the Office of the Comptroller of the Currency to establish Mercury Bank, a fully chartered national lender that would enable it to offer services directly to customers under full federal oversight.
Mercury, which was set up to serve technology startups, also said it had achieved four consecutive years of profitability on a GAAP net income as well as EBITDA basis. It has reached $650 million in annualized revenue.
It said it has more than 300,000 customers, including one in three U.S. startups, with clients such as backend-as-a-service provider Supabase, voice AI platform ElevenLabs and coding platform Lovable.
"We believe the next generation of entrepreneurs will be AI native and will need a banking partner that helps them run their finances and build at the pace AI itself is setting," said Neil Tolaney, General Partner at TCV. "We see Mercury as that partner."
(Reporting by Pritam Biswas in Bengaluru; Editing by Pooja Desai)
