Finance · Profile from Finance Research Companion
Synapse Financial Technologies, Inc.
A failed San Francisco banking-as-a-service (BaaS) middleware company that sat between fintech apps and small US banks. Synapse let apps such as Yotta, Juno, Copper and, until 2023, Mercury offer bank accounts, cards and savings without dealing with a bank directly: its APIs opened accounts at partner banks (Evolve Bank & Trust, Lineage Bank, AMG National Trust and American Bank), moved money among them, and kept the sub-ledger that recorded which end user owned each dollar in pooled "for benefit of" (FBO) accounts. Founded in 2014 by Sankaet Pathak and backed by Andreessen Horowitz, it filed for Chapter 11 on April 22, 2024, after losing its largest customer and falling into disputes with Evolve. A planned ~$9.7m sale to TabaPay collapsed in May; Synapse cut off services, and more than 100,000 end users were frozen out of ~$219m–265m of funds for months. The court-appointed trustee, former FDIC chair Jelena McWilliams, put the gap between what end users were owed and what the banks held at $65–96m. Deposit insurance did not help, because no bank failed. The Federal Reserve put Evolve under a cease-and-desist order in June 2024; the CFPB sued Synapse in 2025 and allocated ~$46.2m from its Civil Penalty Fund to victims; the bankruptcy was dismissed in November 2025 without the shortfall being explained. Synapse is the defining failure of the US partner-bank model.
At a glance
- Founded
- 2014 by Sankaet Pathak (CEO); early product called SynapsePay (reported); co-founder Bryan Keltner (reported, verify)
- Founders
- Sankaet Pathak (CEO throughout; later founded the humanoid-robotics start-up Foundation, which raised $11m pre-seed in 2024, reported)
- Headquarters
- San Francisco, California
- Ownership / structure
- Private, venture-backed (Andreessen Horowitz led the 2019 Series B; other investors reported, verify). Not a bank. Affiliates included Synapse Brokerage LLC, a FINRA-registered broker-dealer used for cash-sweep programmes, and Synapse Credit LLC (reported, verify)
- Leadership
- Sankaet Pathak (CEO to the end); Chapter 11 trustee Jelena McWilliams (Cravath, Swaine & Moore) from May 2024
- Segment and customers
- Fintech infrastructure / BaaS middleware. Customers were fintech programmes (consumer savings and banking apps, business-banking apps, teen banking, investing apps); end users were their customers
- Scale
- ~100 fintech programmes and millions of end-user accounts at peak (company claims, verify); ~$219m of end-user funds frozen in May 2024 (trustee); end users owed ~$265m vs ~$180m identified at the banks (trustee, June 2024)
- Financials
- Private; revenue not disclosed. Raised ~$50m+ of venture equity, including a $17m round (2018) and a $33m Series B (2019) (reported, verify totals)
- Bankruptcy
- Chapter 11 filed April 22, 2024, US Bankruptcy Court, Central District of California (San Fernando Valley; case 1:24-bk-10646; Judge Martin Barash); trustee appointed May 24, 2024; dismissed by order signed November 12, 2025 (reported)
- Signature moves (incl. failures)
- Founding the BaaS middleware layer (2014); Series B and the multi-bank platform (2019); cash-sweep network across partner banks (2020–23); losing Mercury and the Evolve dispute (2023); Chapter 11 and the failed TabaPay sale (2024); frozen accounts and the ledger shortfall (2024); Evolve's Fed order and the BaaS crackdown (2024); CFPB action, Civil Penalty Fund and dismissal (2025)
8 strategic moves analysed
Each one gets a full strategy file in the companion: context, the decision, the financing, what happened, and the lesson.
2014
Founding and the BaaS Middleware Layer
Founding
2019
Series B and the Multi Bank Platform
Funding round / partnership expansion
2020
Cash Sweep Network Across Partner Banks
Launch (product and account structure)
2023
Losing Mercury and the Evolve Dispute
Failure (loss of largest customer) / partnership breakdown
2024
Chapter 11 and the Failed TabaPay Sale
Bankruptcy
2024
Evolve Fed Order and the BaaS Crackdown
Regulatory (enforcement against the partner bank)
2024
Frozen Accounts and the Ledger Shortfall
Failure
2025
CFPB Action Civil Penalty Fund and Dismissal
Regulatory settlement / end of bankruptcy