Just as challenger banks have appeared in the B2C space, so to have B2B startup banks aimed small businesses, among them startups like Qonto (Fr), Tide (UK), Penta (GER) and CountingUp (UK).
Today another such firm, Finom, has closed a €6.5m ($7M) seed funding round led by Target Global, with participation from General Catalyst. Further investors include FJ Labs, Raisin founders Tamaz Georgadze, Frank Freund and Michael Stephan, and Ilya Kondrashov, the founder of MarketFinance. The company will primarily use the fresh capital to develop its product, and to expand further into Italy and France in the summer of 2020.
Finom puts accounting, financial management and banking functions for early-stage businesses and SMEs into one ‘mobile-first’ product. Businesses can set up an online account, with accounts payable and account receivable from both the app and the site in fairly short order. The company was started by the team that also launched Modulbank, ‘neobank’ for SMEs in Russia.
Konstantin Stiskin, co-founder of Finom, told Techcrunch: “The EU SME banking market size is more than €100bn. But according to McKinsey research, European entrepreneurs spend 74% of their time on non-core activities and pay for expensive and inconvenient products. Our goal is to enable small businesses in Europe to become more efficient and to thrive.”
He added: “We are not just a card with an account. We aim to be a foundation for SME’s and their everyday business, covering banking, accounting and financial management within one product.
Finom is now live in France, Italy and Germany and started with e-invoicing in Italy, which allowed it to gain market knowledge and collect the data for accounting/payments and lending.
Mike Lobanov, General Partner and COO at Target Global said: “At Target Global we are great believers in the SME segment… The team of exceptional entrepreneurs standing behind Finom shares our view, and has already built a new standard for offering financial services to SMEs.”
Although Target Global is headquartered in Berlin, it has more than €700m in assets under management, with offices in London, Tel Aviv and Barcelona. Poortfolio includes companies such as Auto1, Delivery Hero, Omio (formerly GoEuro), TravelPerk, Rapyd and WeFox.
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