Finom, European challenger bank for SMEs, raises $54 million


GOODa European challenger bank aimed at SMEs and self-employed people, has raised €50 million ($54 million) in a Series B funding round.

Founded in the Netherlands in 2019, Finom allows businesses to open a bank account online in minutes and receive an IBAN (international bank account number) to support cross-border transactions. On top of that, customers also receive physical or virtual bank cards, expense management tools, and integration support for accounting software.

In truth, the Dutch startup is one of many players in a space that includes the likes of Wise, HonestlyAnd Revolutionbut Finom’s fundraising further highlights the demand for financial services for SMEs in a market that is still largely dominated by big banks — in recent months we have seen challenger banks like Atom Bank And Monument attract significant investments, while SME lenders such as Iwoca also closed significant new financing lines.

“The number one problem [we solve for SMEs] is still an unreasonable banking business: serving SMEs is considered “uninteresting” for traditional banks, as the risks of non-compliance are high, while lending opportunities are also quite limited, meaning that the product for SMEs is much worse, even compared to the digital banks we use every day. “, Yakov Novikov, co-founder and co-CEO of Finom, told TechCrunch via email. “But at the same time, the level of needs and complexity of SMEs is much higher.”

Finom on the web

Finom on the web Image credits: Delicious

Finom presents its main selling point as being a “fully integrated” product covering banking, payments, invoicing, expense management, accounting and tangential services such as business registration.

“This consolidation of services not only saves our customers hours each week, but also significantly reduces their costs by eliminating the need for separate services,” Novikov said.

Show me the money

Founders of Finom: Andrey Petrov, Yakov Novikov, Oleg Laguta, Kos Stiskin.

Founders of Finom: Andrey Petrov, Yakov Novikov, Oleg Laguta, Kos Stiskin Image credits: Delicious

Finom had already raised around 50 million euros, including a couple of seed tranches in 2020 and a previously undisclosed €33 million ($35 million) Series A round, closing in early 2022.

Although Finom is usually grouped with other startups challenging established banking operators, it is technically not a bank – it holds what is known as an electronic money institution (EMI) license which allows it to offer services similar to those offered by a bank, but it cannot offer things like loans. Finom obtained its EMI license in its Dutch home market, but this allows it to operate throughout the European Union (EU).

With an additional €50 million in the bank, the startup is well-funded to accelerate its expansion efforts as it looks to target the entire Eurozone by next year. At the time of writing, Finom claims some 85,000 customers in Germany, Spain, France, Italy and the Netherlands, and although it is technically available throughout the EU, it will begin localization efforts in other markets in the coming months.

The Series B round was co-led by new investor Northzone and existing investor General Catalyst, which has previously backed companies like AirBnb, Stripe and Snap. Other participants in the round include Target Global, Cogito Capital, Ouverture Capital, FJLabs and S16vc.


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