In the era of Fintech and challenger banks in the U.S as well as globally, Grasshopper leads the race in the U.S startup ecosystem as a truly digital bank. This NYC based Startup was the only bank which made itself “a digital-first commercial bank for the global entrepreneur.”
Most of the business banks as well as Fintechs in the U.S make it difficult for international founders to open and access checking accounts without a valid SSN. Additionally, founders and companies need an U.S physical address, phone number etc in order to open checking or savings accounts. Hence, opening business checking and savings account in the US becomes much difficult for international founders.
US laws allows banks to open accounts of any individual or company without SSN or ITIN as long as they are able to verify the identity of the individuals owning majority stake in the company. Also, physical address of the company as well as its President, Secretary, Treasurer, Directors, Executives or Members ( in the case of LLC) can be anywhere around the world excluding countries sanctioned by OFAC. Banks like Grasshopper and Silicon Valley Bank are truly commercial banks focusing on Global Startups incorporated in the U.S.
Grasshopper bank provides free checking accounts, money market accounts, venture debt, Letter of Credit, credit card, free ACH transfers, free wires both domestic as well as international. This makes Grasshopper bank a real competitor to SVB.
Unlike SVB which focuses mostly on VC backed startups, Grasshopper bank also favours bootstrapped businesses along with VC funded Startups thus making it “a truly digital bank focusing on global innovation economy.”
Neo banks like Mercury, Rho, Relayfi etc are gaining popularity in the U.S Fintech space but Grasshopper bank has an edge over these fintechs as it has banking license from the OCC. Startup founders, especially international founders do not want to find themselves in trouble as far as business banking is concerned as it is not that easy to migrate primary checking accounts from one bank to another in case Fintech banks decide to close their operations by themselves or their partner banks force them to shut down their business just like Azlo was forced to close its operations by BBVA.
It would be interesting to see the journey of Grasshopper bank and especially how Grasshopper takes on 800-pound gorilla named SVB in order to grab the market share of VCs funded U.S Startups in the coming years.