Fintech Startup Fragment Secures $9M from Stripe, Jack Altmam, and More for Simplifying Bank Account Reconciliation

Converse with anyone responsible for wrapping up monthly financials, and the overwhelming consensus is that account reconciliation is an unavoidable headache. This sentiment rings even truer for companies processing transactions by the tens of thousands each month.

Fragment, a fledgling enterprise, has introduced a state-of-the-art digital ledger API designed to conduct real-time, double-entry accounting, pinpointing discrepancies with unmatched precision. Helmed by Thomas Neckel as CEO alongside CTO Omi Chowdhury, Fragment was birthed in 2021.

This ventures marks the third collaboration between Neckel and Chowdhury. Their entrepreneurial journey commenced with Scuid, an identity management venture that rivaled Okta, ultimately being acquired by CA Technologies in 2014. Following that, they established Cove.io, a private investment platform that underscored for them the critical need for efficient ledger technology, an issue they encountered firsthand.

“Achieving accurate monthly financial closes necessitates precise balance and reconciliation against bank statements,” Neckel explained to TechCrunch. “This task is normally managed by accountants using enterprise resource planning systems.” However, Fragment boasts software that streamlines this process, surpassing human speed and efficiency, particularly beneficial for high-volume transaction environments.

Neckel highlighted incidents like those between Evolve Bank and Synapse as examples where reconciliation missteps can lead to conflict and accusations—situations Fragment aims to prevent.

Through Fragment’s API, fintech developers are empowered to craft financial products, enabling the seamless integration of funds flow into code and thus into their offerings. According to Neckel, this process ensures rigorous documentation and updates of account transactions.

For instance, the simple act of funding a deposit follows a set of defined steps within the system, accurately updating both the customer’s and the banking institution’s records simultaneously.

“We provide a toolkit for modeling funds flow, paired with a robust database comparable to Postgres, for implementation, complemented by a dashboard for management,” Neckel said, noting Postgres’s established reputation as a reliable open-source database option.

Based in New York, Fragment is not just making waves within the industry but is also gearing up for its official public debut next Monday. Early adopters like TruckSmarter use Fragment for running their fuel payments network, Nala for facilitating payments to Africa, and Pleo deploys it for managing and tracking ledger balances for its 30,000 customers, according to Fragment.

In a recent development, the startup announced securing a $9 million seed investment, with contributions from fintech and technology stalwarts from notable firms like Stripe, BoxGroup, and Avid Ventures, among others. This funding round boosts Fragment’s total raise to $10.8 million since its inception in June 2021, with Gradient Ventures leading its pre-seed investment.

Though facing competition from entities like Modern Treasury, Fragment aspires to transcend basic balance management, aiming to overhaul how online value exchange is conducted.

Drawing inspiration from Stripe’s democratization of payments infrastructure, Neckel envisions equipping small teams with powerful financial tools comparable to those used by Silicon Valley giants.

The injection of new funds will support Fragment’s engineering growth and enhance its market introduction efforts.

“The potential is limitless with the introduction of programmable, double-entry systems into the tech ecosystem,” Adam Rothenberg, a partner at BoxGroup, enthusiastically noted.