- Key insight: Coastal Financial’s decision to acquire the challenger bank GreenFi is a stopgap measure intended to provide time to design the most beneficial long-term strategy for the struggling fintech.
- Why it matters: The strategy could offer a blueprint for other banks that specialize in banking as a service to use when fintech partners run into trouble.
- Forward look: Coastal will consider retaining GreenFi permanently, but Coastal CEO Eric Sprink did not rule out a sale to another buyer.
An Everett, Washington-based community bank known for its
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The $4.6 billion-asset Coastal Financial announced Friday that it has acquired GreenFi, a provider of climate-friendly banking and investment products. Coastal already served as the banking partner for GreenFi’s consumer financial services program.
Coastal did not disclose the purchase price.
GreenFi is Coastal’s oldest fintech partner, having signed on with the bank in 2015. For most of the last decade, GreenFi existed as part of Aspiration.
Once a high-flying challenger bank, Aspiration pivoted to selling carbon offsets, then collapsed under a mountain of debt. CTN Holdings, Aspiration’s successor firm, filed for bankruptcy in April 2025, following the arrest of co-founder Joseph Sanberg on fraud charges.
GreenFi escaped that fate by spinning off in April 2024, converting Aspiration’s consumer financial services operation into a standalone company.
Led by Tim Newell, who previously served as director of financial service products for Tesla, GreenFi raised $17 million last year in a seed investment. Though the seed money provided a start, it wasn’t sufficient to support longer-term independent operations, Coastal CEO Eric Sprink told American Banker on Monday.
Coastal Financial
In order to avoid a cash crunch, GreenFi offered to sell itself to Coastal, its longtime banking partner.
Coastal has been involved in BaaS banking for more than a decade. As of Sept. 30, it counted 29 partners, including established firms like T-Mobile, Dave, Prosper Marketplace and Robinhood Markets.
Friday’s deal forestalls any possibility of customer disruption, with GreenFi continuing to operate under its current management team. It also allows for time to make a fully informed decision about the best course for GreenFi — whether remaining at Coastal, winding down or a potential sale to another company.
“Talking with GreenFi, we said, `Hey, we’ve got a lot going on at quarter-end, why don’t we just land it, we’ll buy these certain assets from you, the customers will have no disruption, and then that will give the board time to evaluate, do we continue to run this long-term as a part of our community bank?” Sprink said.
For his part, Newell said Friday in a press release that the sale “deepens a relationship that has been successful for both organizations.” He was not available for an interview at deadline.
GreenFi offers checking and savings accounts, along with sustainable investment options. On its website, GreenFi offers its users the chance to save money and earn cash back, while also supporting tree-planting and keeping their money out of fossil fuels.
According to Sprink, GreenFi’s environmental-social governance mission resonates within Coastal’s Pacific Northwest footprint.
“You can imagine that this direct-to-consumer brand would play well in Seattle, Portland, Northern California, where we have a lot of customers today,” the Coastal CEO said.
At the same time, Coastal has never operated as a direct-to-consumer digital lender.
“That’s exactly the thesis we’re going to be evaluating over the next 60 days: How good can we be at this direct-to-consumer digital banking?” Sprink said. “We bank a lot of these programs that are direct-to-consumer or direct-to-business, so we also know how difficult it can be. … We just want to be really diligent in our process and make sure we’re making the right long-term decision.”
“Options are value,” Sprink added. “We want to make sure we explore all of the options and we understand the total value. … In our history, we have wound down about 10 other [partner banking] programs, but this one was intriguing enough for us to say, ‘Maybe this one we keep long-term.'”
It’s not the first time that a bank has bought a fintech that was previously its partner. About a year ago, First Carolina Bank