The financial industry has spent over a trillion dollars trying to modernize. Most of that money has disappeared into systems that still can't talk to each other. A startup called Stitch thinks it knows why — and Andreessen Horowitz just backed that thesis with a check.

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Here is a number worth sitting with: $700 billion. That is how much the world's banks collectively spend on technology every single year. Not cumulatively — annually. And yet, if you ask most bank employees what it takes to launch a new financial product, they will tell you: years. Not months. Years.

This is the central paradox of modern banking, and it is one that a startup called Stitch is betting it can finally resolve. This week, the company announced it has raised $25 million in a Series A funding round led by Andreessen Horowitz (a16z), bringing its total funding to $35 million. Existing investors Arbor Ventures, COTU Ventures, Raed Ventures, and SVC also participated. The raise marks a16z's first investment in the Gulf Cooperation Council region — a signal that one of Silicon Valley's most influential venture firms believes the next major frontier in fintech infrastructure is not in San Francisco or London, but in the Middle East.

The question worth asking is not whether Stitch deserves the money. The question is why this problem still exists at all.

The Infrastructure Debt Nobody Talks About

When a bank runs an advertisement promising seamless digital experiences and instant everything, what that advertisement does not show is the decades-old core banking system humming quietly in the background, duct-taped together with middleware, workarounds, and integrations that have been patched so many times nobody fully remembers how they work anymore.

Legacy infrastructure in financial services is not just an inconvenience. It is a structural trap. Financial institutions have spent the last several years pouring money into digital transformation initiatives, but most of that investment has been layered on top of existing systems rather than replacing them. The result is something like building a modern apartment on a foundation designed for a single-story house in 1970. The aesthetic upgrades are real. The structural problem is untouched.

This matters enormously right now because the arrival of artificial intelligence has changed the stakes. Every major bank in the world is trying to deploy AI across its operations, from credit decisioning to fraud detection to customer service. But AI systems are only as reliable as the data they consume, and data is only as clean as the systems that produce it. If the underlying system of record is fragmented — if lending data lives in one silo, payment data in another, and card data somewhere else entirely — then AI built on top of it will simply be a faster way to produce unreliable outputs.

"AI on top of broken infrastructure is a dead end," said Mohamed Oueida, founder and CEO of Stitch, and it is difficult to argue with the logic. The company he built is designed to address this at the foundation rather than the surface.

What Stitch Actually Does

Stitch positions itself as an operating system for modern financial institutions: a single, cloud-native platform that spans lending, cards, payments, and ledgers. The crucial design decision — and arguably the most commercially intelligent one — is that institutions do not have to rip out their existing systems to adopt it. They can bring in Stitch module by module, replacing the most broken pieces first while keeping the rest operational.

This matters because the nightmare scenario for any bank's technology team is a core system migration that goes wrong. The consequences are not just embarrassing; they are potentially catastrophic. Customers lose access to their money. Transactions fail. Regulatory scrutiny intensifies. The risk is so severe that many institutions have simply decided to live with their old systems indefinitely, hoping nothing critical breaks.

Stitch's gradual adoption model is designed to make that risk calculus look different. Rather than asking institutions to bet the whole operation on a single replacement event, it offers an incremental path toward a unified system of record. The founders have credibility on this front: the team came out of institutions including NPCI, FIS, Barclays, Santander, and Azentio — meaning they have lived inside the very systems they are now trying to replace.

The Numbers That Got a16z's Attention

Venture capital firms at a16z's level do not write first-in-region checks based on narrative alone. They want evidence that the thesis is working. Stitch provided some remarkable ones.

In the last six months, more than $5 billion has been transacted on the platform. Customer numbers grew tenfold in 2025. Revenue grew twentyfold in the same period. These are not the metrics of a company that has a compelling deck and a good story — they are the metrics of a company that has found genuine product-market fit in a segment that traditional enterprise software vendors have largely neglected.

The company currently operates across the GCC, Africa (including Egypt and Kenya), and Southeast Asia. Its customer list includes LuLu Exchange, Noqodi, Foodics, and Raya Financing — the lending arm of the automotive giants Hyundai and Peugeot. The geographic spread is deliberate. Emerging markets often have the most to gain from next-generation financial infrastructure precisely because they are less encumbered by legacy systems and more willing to adopt new platforms at scale.

Alex Rampell, General Partner at Andreessen Horowitz, framed the investment in terms that go beyond Stitch's current footprint. The infrastructure debt accumulated by financial institutions, he argued, is now the single biggest obstacle to AI adoption — and what Stitch is building is what makes everything else possible.

Why This Moment Is Different

Fintech has gone through several distinct hype cycles over the past decade. First came the challenger banks, promising to make banking human again. Then came embedded finance, promising to put financial products everywhere. Each wave produced real innovation and also real disillusionment when the complexity of working within — or around — legacy financial infrastructure became apparent.

What makes the current moment different is that AI has made the infrastructure problem impossible to ignore. For years, banks could tell themselves that digital transformation was a front-end problem: better apps, better interfaces, better customer journeys. The back end could wait. Now the back end is the bottleneck, visibly and urgently. You cannot train a useful AI model on data that does not have a single, authoritative source of truth. You cannot automate credit decisions if your lending data is in a different system from your customer identity data. The fragmentation that was always a problem has become an emergency.

The $25 million Stitch raised will go toward accelerating product development, deepening its presence in the GCC and broader MENA region, and expanding its global go-to-market operations. If the company executes, the bet is that financial institutions across the world will eventually recognize that they cannot buy their way to AI readiness through more point solutions — that what they actually need is a clean foundation to build on.

A trillion dollars of digital transformation spending has not delivered that foundation yet. Stitch is arguing it can. And for the first time in a long time, the timing and the technology may actually be on its side.