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Westwood-based ZSuite Tech has raised $11 million in a funding round led by a banking trade group and an investment fund focused on community banking.
ZSuite, which offers a digital commercial escrow and subaccounting platform, said in a statement today that it had finalized a Series A funding round with the Independent Community Bankers of America and BankTech Ventures LP.
BankTech Ventures is a strategic investment fund focused on providing financing to bank technology companies that help banks maximize efficiencies and expand revenue opportunities, the statement said.
More than 100 community banks invest in the fund, which is led by the ICBA, the investment bank Hovde Group, and a team of community bank and fintech leaders, the statement said. ZSuite Tech is among eight bank technology companies that have received funding so far.
“We’ve had the pleasure of knowing Nathan [Baumeister, ZSuite CEO,] and the ZSuite team for a while, as they were a former participant in the ICBA ThinkTech Accelerator, who is our partner at BankTech Ventures,” Carey Ransom, managing director for BankTech Ventures, said in the statement. “Their performance there, as well as their resonance with community banks, excited us to get more involved in this round. We’re thrilled to be part of the team.”
ZSuite said it would use the capital for operations and product development to meet the demand for digital cash and treasury management tools.
“Sometimes referred to as Virtual Account Management (VAM), this service offering has typically only been offered by large international institutions,” the statement said. “ZSuite aims to make this technology available to every commercial banker, regardless of size.”
ZSuite was founded in 2019 as a spin-off from Arlington-based Leader Bank. The company said it works with more than 40 banks nationwide and has a digital platform supporting about 41,000 accounts.
“With rates on the rise, low-cost, core deposits are in demand,” Charles Potts, ICBA’s executive vice president and chief innovation officer, said in the statement. “ZSuite’s products help attract these valuable funds, through a streamlined process – reducing labor-intensive escrow and subaccounting processes, while conforming to regulatory requirements. We know banks need these types of tech solutions and that’s why we chose to partner with ZSuite’s future.”
ZSuite had completed the funding round in August.
Editor’s Note 1:45 p.m., Nov.18, 2022: This article has been updated to clarify that ZSuite had one Series A funding round.
