▼ Summary
– Finom, an Amsterdam-based challenger bank for European SMBs, raised €115 million in a Series C round, following a $105 million growth funding from General Catalyst.
– The startup offers a financial platform combining banking, invoicing, and AI-enabled accounting, aiming to serve one million business customers by 2026.
– Finom’s Series C was led by AVP, with participation from new and existing investors, though it has less funding than competitors like Revolut or Monzo.
– General Catalyst’s non-traditional funding model, which doesn’t take equity and is tied to growth, helped accelerate investor interest in Finom’s latest round.
– Finom plans to use the new funding for strategic acquisitions, product expansion (like lending), and internal AI automation, while focusing on key European markets.
Europe’s small business banking sector is heating up as Finom secures €115 million in fresh funding to accelerate its expansion. The Amsterdam-based fintech, which specializes in financial services for SMEs, has doubled its revenue this year while attracting significant investor confidence. This latest Series C round brings its total funding to approximately $346 million, positioning it as a serious contender in Europe’s competitive digital banking space.
The investment was led by AVP (formerly AXA Venture Partners), with participation from new backer Headline Growth and existing supporters including General Catalyst, Cogito Capital, and Northzone. Finom’s unique approach combines business banking, invoicing, and AI-powered accounting tools into a single platform, a strategy that CEO Andrey Petrov believes could eventually replace traditional accountants for many entrepreneurs.
Unlike many fintech competitors, Finom has adopted an unconventional funding strategy. General Catalyst’s recent $105 million injection came through its Customer Value Fund, which focuses exclusively on growth financing rather than equity stakes. This structure allows Finom to scale aggressively while maintaining greater control over its valuation. Chairman Kos Stiskin notes the company could have reached profitability with existing funds but chose to pursue additional capital to fuel faster expansion.
With 125,000 business customers currently on its platform, Finom faces stiff competition from better-funded rivals like Revolut and N26. However, the company sees opportunity in markets where traditional banks still dominate SME banking. Its focus has shifted from earlier UK ambitions to core European markets including France, Italy, and Spain, regions where digital banking penetration among small businesses remains relatively low.
The new capital will support several strategic initiatives beyond customer acquisition. Petrov hints at potential acquisitions to expand Finom’s product suite or customer base, marking a departure from its previous organic growth strategy. The company is also testing lending services in the Netherlands, with plans to roll out credit products across other markets. These moves align with Finom’s broader vision of becoming a one-stop financial hub for SMEs, handling everything from daily transactions to tax reporting.
Internally, the company is embracing AI not just for product features but also for operational efficiency. With a 500-person team, Finom plans limited hiring, instead relying on AI agents to automate routine tasks, an approach that Petrov claims is already showing promising results. This tech-driven strategy complements the company’s leadership restructuring, which now centers on Petrov as sole CEO following earlier shared leadership arrangements.
While Finom operates primarily with electronic money licenses in most markets, its partnership with Solaris in Germany demonstrates flexibility in navigating regulatory landscapes. As European SMEs increasingly embrace digital financial tools, Finom’s latest funding round positions it to capitalize on this shift, provided it can differentiate itself in an increasingly crowded fintech arena.
(Source: TechCrunch)
