Securing a €50m plus funding round for startups has not been as plain sailing these days as it was a few years ago, amid a drying up of capital and challenging economic circumstances.
But SME banking provider Finom has just landed a €50m Series B funding round co-led by existing investor General Catalyst and new backer Northzone.
And the co-founder and head of strategy of Finom Kos Stiskin says, not in a gloating fashion, “it was quite easy” to get the funding.
Stiskin told Tech.eu:
“To be honest, it was quite easy to attract, for the reason that the company has good strong indicators, we have an excellent market and, in general, we have everything we need to attract money.
"And because we understood the current structure of the market, we didn’t really try to negotiate some better terms, but we were looking for the right partner, the right investor.
"And as soon as the right investor was on board, we quickly agreed on the terms and signed and closed the round quite quickly.”
The funding round, which brings Finom’s total raised capital to over €100 million, also saw participation from existing investors Cogito Capital, Entrée Capital, FJLabs, s16vc, and Target Global.
Finom said the funds will be used to beef up its product offering, undergo new marketing initiatives and expanding its accounting services to meet demands from SMEs.
The challenger, which has a Netherlands-stamped e-money licence, offers banking services aimed at SMEs, including online banking, physical and virtual cards, payment processing and invoicing, as well as a recently launched FX offering.
It competes against big banks and a raft of startups such as Wise and Revolut.
Founded in 2019, Finom, which employs around 250 people, has offices in the Netherlands and Cyprus and is also hiring staff in Spain and Poland, where it also offers its services.
It also has a presence in several other European countries, including Germany, France, Italy, Spain and Belgium.
"We're beginning a journey in the EU's SME banking sector, where there's still vast growth potential, with less than 3% market penetration achieved so far by neobanking contenders," added Stiskin.
Asked about the virtues of bringing on board new investor Northzone, Stiskin said:
“The depth of the analysis that Northzone did was a level higher than what the other funds did. By the way, General Catalyst must not be forgotten.
“And even if other funds might have given better conditions, or the same conditions, we would still have chosen Northzone and General Catalyst to co-lead, for the reason that the level is higher than that of any other participant.
"Also, before we even closed the round, only signed the termsheet, we already have had quite deep interaction with the Northzone and GC team on HR and PR topics, and we are receiving a huge amount of support, a huge amount of care for us, which, of course, is very important.”
On future hires, he added:
“We have a huge hiring plan for this year. We plan to double the number of people in 2024. I’m not sure that we will succeed, since it is quite difficult operationally, but in general the plan for the year is to double from almost 300 team members, to 500. We have already hired some of positions in the past month and a half, hope to keep up the up the hiring pace."