Key takeaway: Buying Arc will give Axos access to thousands of early-stage and mid-market tech firms, as well as valuable AI technology the bank can use to shar...
Axos Financial, Inc. currently carries an Alpha Score of n/a, giving AlphaScala's model a neutral read on the setup.
Axos Financial agreed Tuesday to acquire Arc Technologies, a San Francisco fintech whose AI-native platform handles cash management and debt capital markets for early-stage and mid-market technology companies. The $29.2 billion-asset bank did not disclose a purchase price.
Arc was founded in 2019 and raised $31 million in equity. Ten months ago it spun off its AI underwriting platform as F2 AI, with cofounder Don Muir leaving to lead the new company. President Nick Lombardo stepped in as CEO. Lombardo will continue to lead Arc under Axos, he said Tuesday on LinkedIn.
“We built Arc with the belief that businesses deserve a more intelligent and integrated financial platform,” Lombardo said in a press release. “Joining Axos gives us the infrastructure, product breadth, and scale to pursue that vision significantly faster.”
The deal gives Axos access to thousands of tech firms Arc serves and brings in its AI-driven agent, Archie, which automates balance monitoring and debt sourcing. In the release, CEO Greg Garrabrants said the combination would create “a differentiated digital banking solution for businesses across their full lifecycle.”
The acquisition mirrors a larger push. Capital One closed its $5 billion purchase of Brex in April, gaining an AI payments platform that handles back-office tasks. Capital One is also selling Axos $3.2 billion in IRA deposits, a deal expected to close in the second half of 2026. Axos finalized a $2.3 billion deposit purchase from SMBC MANUBANK in May and bought equipment-finance lender Verdant Capital for roughly $43.5 million in September.
Arc’s platform targets a specific pain point: technology companies that lack the track record or collateral for traditional banking services get real-time cash visibility and access to debt capital markets. Axos’s deposit base and lending capacity could expand those options. Lombardo wrote on LinkedIn: “For years, we built great software on top of banking infrastructure we didn’t control. Joining Axos enables us to pair our technology with direct banking infrastructure under one roof.”
Arc raised a fraction of the capital of Brex, which had gathered more than $1 billion before its sale. The undisclosed price suggests Axos is buying a team and client list, not a market leader. That could simplify integration. Axos has been absorbing multiple businesses: equipment finance from Verdant, digital banking from SMBC, and now a 60-person fintech with AI tools.
Axos’s asset size reached $29.2 billion, up 23% since the end of 2024. Net income for the quarter ending March 31 was $124.7 million, 18.5% above the prior year. The company was founded in 2000 as Bank of Internet USA and has been expanding its commercial lending and deposit base.
For Arc’s existing clients, “the experience today remains the same,” Lombardo said. The deal is expected to close this month.
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