Finom, a European challenger bank targeting small businesses and freelancers, has raised €50 million ($54 million) in a Series B equity round.
Founded in the Netherlands in 2019, Finom allows businesses to open an online bank account in minutes and receive an IBAN (International Bank Account Number) to support cross-border transactions. In addition to that, customers also receive integration support for physical or virtual bank cards, expense management tools, and accounting software.
In fact, the Dutch startup is one of a number of players in the space, including Wise, Qonto, Revolut and others, but Finom's funding represents a significant jump in a market still effectively dominated by big banks. This further highlights the demand for small business financial services. In recent months, challenger banks such as Atombank and Monument have attracted significant investment, while SME lenders such as Iwoca have also seen the closure of significant new funding lines.
“The biggest problem is [we solve for SMEs] Banking has always been irrational — serving small businesses is considered “uninteresting” by traditional banks because compliance risks are high and lending opportunities are very limited. “This means that their products are far inferior to the digital banks we use on a daily basis,” Yakov Novikov, co-founder and co-CEO of Finom, told TechCrunch via email. Ta. “But at the same time, the needs and level of complexity for small businesses is much higher.”
Finom on the web image credits: Finom
Finom touts its core selling point as being a “fully integrated” product across ancillary services such as banking, payments, invoicing, expense management, accounting and business registration.
“This integration of services not only saves our clients time each week, but also significantly reduces costs by eliminating the need for separate services,” Novikov said.
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Finom founders: Andrei Petrov, Yakov Novikov, Oleg Laguta, Kos Styskin image credits: Finom
Finom has raised approximately EUR 50 million to date, including several seed tranches in 2020 and a previously undisclosed EUR 33 million ($35 million) Series A round, expected in early 2022. It ended in
Although Finom typically joins forces with other startups to challenge the established banking industry, it is not technically a bank. It holds a license known as an Electronic Money Institution (EMI) license which allows it to offer services similar to those offered by banks. Services such as financing cannot be provided. Finom has secured an EMI license in the Dutch domestic market, which will enable it to operate across the European Union (EU).
With another 50 million euros in the bank, the startup wants to target the entire eurozone by next year and is well-funded to accelerate its expansion efforts. As of this writing, Finom claims to have around 85,000 customers in Germany, Spain, France, Italy, and the Netherlands, and while technically he's available throughout the EU, there are still a few more to come. We plan to begin localization efforts for additional markets within the next month.
The Series B round was co-led by new investor Northzone and existing investor General Catalyst, which has previously backed companies such as AirBnb, Stripe, and Snap. Other participants in this round include Target Global, Cogito Capital, Entrée Capital, FJLabs, and S16vc.