Novo, a financial technology company, has pulled in $40.7 million in venture capital. The FinTech focuses on digital banking for small to medium-sized businesses (SMBs).
The company said in a press release that the cash will go toward building out its platform and doubling its staff of 60 employees over the next year. The funding round was led by Valar Ventures with participation from Crosslink Capital, Rainfall Ventures, Red Sea Ventures and BoxGroup.
More than 100,000 small businesses have opened a Novo account since the company launched in 2018. The release added that the company was named one of CNBC’s Best Business Checking Accounts of March 2021 and Money Magazine’s Best Business Checking Accounts of 2021.
“The modern-day online small business owner expects a digital banking platform to offer more than a well-designed interface — they want a robust, centralized and no-fee application,” said Michael Rangel, CEO and co-founder of Novo. He added that his company “has built a digital banking platform that makes everyday financial tasks a breeze — from creating invoices and receiving payments to connecting … accounts with other tools their businesses need to operate — like Stripe, Shopify, Square and more.”
“The ability of the Novo team to grow the company rapidly during a year when businesses have faced unprecedented challenges is impressive,” said Andrew McCormack, founding partner at Valar Ventures. “Novo tripled its small business customer base in the first half of 2021.”
Over the next year, “Novo will continue to focus on solving the top problems small businesses face: cash flow, through faster payments and access to lending products banks traditionally do not offer to small businesses,” said Tyler McIntyre, chief technology officer and co-founder of Novo.
The acceleration of SMB banking’s evolution is happening in part because small businesses are looking for the enhanced functionality that consumers and larger corporates enjoy. That has put SMBs increasingly at the center of banking innovation.