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Powered by Battery  |  July 21, 2020
How One NYC-Area Bank Is Carving a New Path in Fin-Tech Amidst a Pandemic

This season of the Powered by Battery podcast features portfolio executives representing companies from various geographies and technology sectors. The views expressed here are solely those of podcast guests, not Battery. If you’re interested in learning more about these companies, or others in the Battery portfolio, you can access more information here.

Few Battery portfolio companies experienced the Covid-19 pandemic as deeply as Cross River Bank*. The company—a hybrid bank/fin-tech startup—is based in Fort Lee, NJ, right outside New York City, one of the early pandemic hot spots. The company also became deeply involved in processing loans through the federal Paycheck Protection Program to help aid small businesses in danger of going out of business in the recent recession. To top it off, Cross River Founder and CEO Gilles Gade is a volunteer emergency medical technician (EMT) in New York; he continued to make evening runs during the depth of the pandemic earlier this spring.

In this episode of Powered by Battery, we talk with Gade about the company’s origins, how it is dealing with the pandemic and what a return to work for Cross River’s employees will look like. Have a listen.

Powered by Battery · How One NYC-Area Bank Is Carving a New Path in Fin-Tech Amidst a Pandemic

Key Takeaways:

  • Out of crises come opportunities. Gade founded Cross River in the aftermath of the 2008-9 financial crisis, when he realized that the then-nascent marketplace-lending industry needed banking partners to make their businesses work. These new startups provided a “front-end” interface for consumers but needed a chartered bank on the back end to actually process loans and deal with regulators. But with many big banks still smarting from the financial crisis and unwilling to take on more risk, the startups had few options for partners. Cross River stepped in to fill the void, and last year processed $12 billion in loans for its partners, Gade says.
  • Be nimble in the fact of new financial realities and regulations. When the U.S. Congress earlier this year launched its emergency Paycheck Protection Program, which offered forgivable loans to small businesses struggling to save jobs amid the Covid-19-induced recession, Cross River saw another opportunity. It worked with fin-tech partners, including Intuit, Divvy and others, to process loans for customers of those businesses. As it turned out, Cross River processed more loans than many of the nation’s largest banks—including Citi and Citizens Bank—and was able to focus on the smallest of the small businesses that were the real focus of the PPP program. Cross River’s average loan size? $39,000.
  • In a crisis, it’s important to focus on your employees first. Cross River saw Covid-19 coming and, working with its board, shut down its New York-area offices early, on March 9, to focus on preserving the health of its workforce and their families. The company also offered employees PPE like masks, gloves and hand sanitizer, and even virtual access to doctors through the company.
  • Realize that the corporate office may change profoundly after the pandemic ends. Gade says he expects only about 50% of his workforce to ultimately return to the office full time; others may work from home permanently. Those coming back to work at the bank will find hand sanitizer stations, one-way traffic through much of the office, staggered work schedules and an attendant providing coffee and snacks in the kitchen, so large numbers of people don’t congregate there.
  • It’s OK to have a side hustle. Gade is a volunteer EMT in New York City and continued to make evening runs even through the depths of the Covid-19 crisis in April and May. He says it’s critical for all employees to get away from their screens and perform other activities to maintain mental health.

This material is provided for informational purposes, and it is not, and may not be relied on in any manner as, legal, tax or investment advice or as an offer to sell or a solicitation of an offer to buy an interest in any fund or investment vehicle managed by Battery Ventures or any other Battery entity. 

The information and data are as of the publication date unless otherwise noted.

Content obtained from third-party sources, although believed to be reliable, has not been independently verified as to its accuracy or completeness and cannot be guaranteed. Battery Ventures has no obligation to update, modify or amend the content of this post nor notify its readers in the event that any information, opinion, projection, forecast or estimate included, changes or subsequently becomes inaccurate.

The information above may contain projections or other forward-looking statements regarding future events or expectations. Predictions, opinions and other information discussed in this video are subject to change continually and without notice of any kind and may no longer be true after the date indicated. Battery Ventures assumes no duty to and does not undertake to update forward-looking statements.

*Denotes a Battery portfolio company. For a full list of all Battery investments, please click here.

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