Finom, a European challenger bank for SMEs and freelancers, received €50 million ($54 million) in Series B stock.
Finom, founded in the Netherlands in 2019, helps companies register online bank accounts in minutes and get IBANs for cross-border transactions. Additionally, users get real or virtual bank cards, spending management tools, and accounting software connection help.
In a market where big banks dominate, Finom’s fundraising efforts highlight the demand for SME financial services. Challenger banks like Atom Bank and Monument have attracted significant investments, and SME lenders like Iwoca have closed large new funding lines.
“The number one problem [we solve for SMEs] is always unreasonable banking—serving SMEs is considered ‘uninteresting’ for traditional banks due to compliance risks and limited lending opportunities, leaving the product for SMEs much worse even compared to the digital banks we use every day,” Finom co-founder and co-CEO Yakov Novikov told Eltrys by email. “But SMEs have much higher needs and complexity.”
Finom markets its “fully integrated” package as including banking, payments, invoicing, cost management, accounting, and other services like company registration.
Novikov claimed that consolidating services saves customers hours each week and considerably lowers their expenditures by removing the need for separate services.
Show me the money.
Finom secured roughly €50 million, comprising two 2020 seed tranches and an unknown €33 million ($35 million) Series A investment in early 2022.
Finom is often grouped with other startups challenging established banking incumbents, but it is not a bank. It holds an Electronic Money Institution (EMI) license, which allows it to offer similar services but not lend. Finom obtained an EMI license in the Netherlands, allowing it to operate throughout the EU.
With another €50 million in the bank, the business may expand throughout the Eurozone by next year. While Finom is theoretically accessible throughout the EU, it will begin localization efforts for more countries in the coming months. It now has 85,000 clients in Germany, Spain, France, Italy, and the Netherlands.
New investors Northzone and General Catalyst, which have supported AirBnb, Stripe, and Snap, lead the Series B investment. The round also included Target Global, Cogito Capital, Entrée Capital, FJLabs, and S16vc.
European SME challenger bank Finom raises $54M.
