CEO Michael Sanchez has raised $45 million from Toronto-based financial technology investor Georgian and bank tech giant Fiserv to grow Savana, his Malvern-based company that develops software to make banking faster and more convenient for staff and customers.
With the new money, the company plans to hire 100 people in Chester County next year, boosting employment to 300, Sanchez said.
“We do for bank customers what Amazon Prime does for shoppers: build a continuous network that’s always running,” he said. “We call it a digital delivery platform,” with application programmer interfaces (API) open to users, so banks can assemble their products right onto the system.
“Old legacy software systems are a problem for banks; start-up fintech companies are nipping at their heels,” stealing customers with faster loan decisions and simpler approvals, Sanchez said. Banking is complex — government security checklists and processes, multiple software vendors, specialized systems for credit cards, investments, mortgages.
Savana’s goal is to “keep it behind the scenes,” he said. “All you do is click.”
Its customers include TD Bank, one of the top lenders on the East Coast, and online-only Live Oak Bank, the North Carolina-based company that edged out Wells Fargo last year to become the top lender under the government’s main Small Business Administration program .
Arkadi Kuhlmann serves on Savana’a board. In 1996, he founded the bank ING Direct — what’s now Capital One 360. Instead of building on the usual patchwork of bank applications based on different kinds of loans, deposits and investments, “Sanchez built us a single operating system, which we put into nine different countries,” Kuhlmann recalled.
Sanchez and his brother, Frank, “knew you could only pile so many applications on top of old applications, like wallpaper over wallpaper, before you had to strip all the software down and build a new core,” Kuhlmann said. “They saw what the digital architecture of banks would look like and figured out how to move the banks onto a new core without blowing them up.”
At 64, Michael Sanchez has already spent more than 40 years putting banks online: He and Frank, now 65, spent 33 of those years building their first company, Sanchez Computer Associates, which eventually employed 600 at its Great Valley offices.
That company developed “core” software that linked accounts on the IBM mainframes that powered many of the nation’s banks; its software platform sends automatic transaction reports around the country at the end of each workday. They took the company public in 1996 and sold it to Fidelity National Financial eight years later for $179 million.
The brothers remained at Fidelity as senior executives in the mid-2000s, then branched out: Michael focused on Savana, and Frank helped Kuhlmann start Silicon Valley-based Zenbanx and sold it to SoFi in 2017.
The brothers also started Finxact, which updated Sanchez’s tech streamlining mission to a “next generation” of banking services so users didn’t have to wait until the end of the day to update. They sold that company to payments giant Fiserv in 2019. Frank, based in Florida, is now vice chairman of Fiserv.
The brothers grew up on the Upper Main Line because their father worked at a King of Prussia data center back when telephone monopoly AT&T charged users “long distance” by the mile. That neighborhood was where the main East Coast phone lines crossed those headed West, reducing costs for big users.
There’s a next generation in the business: One of Michael Sanchez’s children “is one of our most important software developers at Savana,” he said. Another works for a King of Prussia business group, and a third is a sheep farmer: “She watched me live this stressful life, and she’s doing something very different,” he said, smiling.
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