Citi Ventures has made a strategic investment in Capstack Technologies, the developer of what it describes as the "first" bank-to-bank marketplace designed to increase profitability and address asset concentration risk.

Capstack says its marketplace concept promotes transparency, collaboration, and efficiency among small and medium-sized banks and that the initiative aligns with the US financial sector's imperative to reduce concentration risk following the collapse of Silicon Valley Bank and other recent failed financial institutions.

The investment arm of Citi said Captstack’s offering could create opportunities for the US bank to “engage differently” with a sizable segment of the financial services ecosystem.

“Citi Ventures is committed to investing in companies that have the potential to drive our industry forward,” said Jeff Flynn, director of Citi Ventures. “Capstack Technologies’ innovative approach could fundamentally change the way smaller banks manage risk and grow their businesses.”

Coinciding with establishing an advisory board and adding several executives from community and regional banks, Capstack added that the investment from Citi was a “testament to its innovation” following a $6 million fundraise last summer.

"Securing this strategic investment from Citi Ventures, forming a distinguished advisory board, and welcoming experienced executives from community and regional banks collectively mark a pivotal moment for Capstack Technologies," stated Capstone Technologies chief executive Michal Cieplinski. "These milestones validate our vision and accelerate our mission to revolutionise banking technology for the community.”

Citigroup chief executive Jane Fraser recently announced that the bank plans to cut 20,000 jobs over the next two years.

Since her appointment in March 2021, Fraser has overseen a radical shakeup at the US’ third-largest lender, including sweeping organisational reforms announced in September.

This change saw the heads of Citi’s five interconnected businesses – wealth, services, markets, US personal banking, and banking & international – begin to report directly to Fraser and become members of the executive management team, with five layers of management being removed from its structure.

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