Evaluating only Nearside’s profile at its peak — without knowing the outcome — the model ranked Unit economics as the #1 likely cause. That’s exactly how it died.
Key Events Timeline
FOUNDING
Sheel Mohnot and Jake Gibson founded Nearside (as Hatch Bank) to serve US small businesses with no-fee banking.
FUNDING
Nearside raised a $35M Series B led by Accel Partners, bringing total raised to $60M.
LAYOFF
Nearside conducted significant layoffs as rising interest rates and BaaS infrastructure costs squeezed margins.
SHUTDOWN
Nearside abruptly shut down, freezing thousands of small business accounts without adequate advance notice.
Full Analysis
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Documented cause
Nearside, formerly known as Hatch Bank, was a US business neobank targeting small businesses and gig workers, founded in 2019 by Sheel Mohnot and Jake Gibson. It raised $60M including a $35M Series B in 2022 led by Accel. In late 2023, Nearside abruptly shut down, cutting off access to accounts for thousands of small business customers. The bank's closure coincided with a broader collapse in banking-as-a-service infrastructure and tightening credit markets making unit economics unworkable for SME-focused neobanks.
Lesson
“SME neobanks face brutal unit economics; raising $60M cannot compensate for unsustainable CAC and churn.”