Mercury CEO Says AI Is Breaking the Old Startup Model

The distance between an idea and a functioning business has rarely been shorter. Entrepreneurs operate in a business environment where artificial intelligence (AI) is lowering the cost of starting companies. As result it is accelerating business formation and creating demand for banking experiences built around software rather than branch networks.

That shift is forcing financial institutions to reconsider how they serve entrepreneurs.

It was top of mind during a conversation with PYMNTS CEO Karen Webster and Mercury Co-Founder and CEO Immad Akhund. The shift sits behind Mercury’s recent $200 million Series D funding round, which valued the company at $5.2 billion and followed four consecutive years of profitability. The company also recently received conditional approval from the Office of the Comptroller of the Currency to establish Mercury Bank, N.A.

Akhund said the activities come as a new generation of entrepreneurs is rising.

“We saw 2.5x increase in applications in Q1 this year versus Q1 last year,” Akhund told Webster, noting that AI tools are making it possible for founders to build and launch businesses with fewer resources than were previously required.

Mercury’s customer base was initially concentrated among venture-backed startups. Today, it extends across eCommerce, professional services and a broader collection of digitally native businesses. More than 300,000 customers use its platform.

Webster framed the change as one of the defining characteristics of the current technology cycle.

“The velocity at which these businesses are being created is really astounding,” she observed during the discussion. “I think it’s exciting.”

Building the Anti-Legacy Bank

Akhund’s view of traditional banking reflects his own experience as a founder. Before launching Mercury, he spent years building technology companies and navigating the challenges of entrepreneurship.

“Part of the reason I started Mercury is I really feel for this entrepreneur’s journey because I’ve been an entrepreneur since 2006,” he said.

That perspective helped shape Mercury’s identity as what Akhund described as an alternative to legacy institutions.

“We really think about banking as, ‘How do we build all of this financial software to help your business run?’” he elaborated. “It’s not just the checking and savings account.”

The company’s product suite now includes business banking, payments, invoicing, spend management, corporate cards, treasury capabilities and personal banking offerings for qualifying customers. It has also expanded into AI-powered financial analysis through Mercury Insights and plans to introduce Mercury Command, a natural-language interface designed to help customers complete financial workflows.

Webster characterized the relationship between business and personal finance as a growing opportunity.

“It becomes your cornerstone—the business and personal—which is always connected,” she said.

Life After Synapse

The conversation also addressed the fallout from the Synapse collapse and its impact on Banking-as-a-Service models. Akhund argued that one of the lasting lessons from the episode was the importance of direct relationships between FinTechs and their partner banks.

“What that chapter showed was that it was better for FinTechs to work directly with banks,” he said.

According to Akhund, the industry has moved away from intermediary structures that once sat between banks and FinTech providers. New sponsor-bank platforms and more mature bank partnerships have made direct engagement easier and more practical. At the same time, Mercury’s pursuit of a charter reflects another reality. As FinTech firms grow, the sponsor-bank model can become limiting.

“It’s just hard to have someone in between us and the regulators when we have the scale that we do,” Akhund said. “It just makes a lot more sense to get a bank charter and have that direct relationship.”

He emphasized that the charter effort is primarily about scale, regulatory alignment and expanded capabilities rather than dissatisfaction with partner-bank relationships. Mercury expects a national bank charter would eventually support services including broader lending products, deeper payments infrastructure and direct access to networks such as Zelle.

AI’s Role in Financial Operations

Artificial intelligence remains central to Mercury’s strategy, both for customers and for the company itself.

Akhund described two tracks. One focuses on highly technical businesses already operating through AI-native environments such as coding assistants and agentic workflows. The other focuses on bringing AI directly into Mercury’s interface for customers who want simpler access to automation.

“We want to expose AI features to them,” he said, describing tools that help customers analyze transactions, understand cash flow and complete multi-step operational tasks.

The company is approaching automation cautiously. Rather than allowing AI systems to execute financial actions independently, Mercury currently requires users to approve proposed actions before they are carried out.

For Mercury, the larger objective is straightforward. Akhund sees a future in which banking functions are embedded into business operations rather than treated as a separate activity.

The capital raise, charter application and AI investments all point toward that same destination: building a financial platform designed for founders who increasingly expect software to help run their businesses rather than simply hold their deposits.