On Wednesday, San Francisco-based Seed, a venture-backed online banking platform for freelancers and small business owners, sent an email to its users announcing it will be winding down its customer-facing service.
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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.
In its email to users, the company said that “Seed is shutting down. We’ve done everything we could to avoid this situation, but we must close all customer accounts over the coming weeks. Needless to say, we’re heartbroken, and especially regret the impact this will have on our customers, because our whole mission was to make things a little easier for each of you.”
The company continued, “While we ultimately weren’t able to create a sustainable alternative to the big banks, we’re glad that we tried.” The email said that all user accounts must be closed by the end of November, and that all accounts with remaining balances will be closed and the company will send a check to the account-holder with the remaining balance.
According to Crunchbase data, the company has raised $5.2 million in known venture funding from a pretty hefty set of investors. The company’s stakeholders include institutional investors at Y Combinator, CrunchFund, 8VC, SV Angel, and General Catalyst. Individual and angel investors include Founders Fund partner Cyan Banister, Scott Banister, Box founder Aaron Levie, Nuzzel founder Jonathan Abrams, and YC partners Paul Graham, Paul Bucheit, Michael Siebel, and Dalton Caldwell, among other investors publicly disclosed by the firm.
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.
Illustration: Li-Anne Dias