The small business banking platform Novo has raised $90 million in Series B funding a $700 million valuation led by . The round also saw continued participation from existing investors Valar Ventures, Crosslink Capital, Rainfall Ventures, and BoxGroup.
This latest round brings Novo’s total funding to more than $135 million. With the additional $90 million, Novo plans to build out modern lending capabilities, integrations, and proprietary products. With new advanced features that entail a series of enhancements, the platform is focused on allowing small businesses to send and receive money more quickly.
Saagar Kulkarni, Partner at Stripes who will be joining Novo’s Board of Directors, said,
“Despite being the heart of the US economy, more than 30 million small businesses in the US have always struggled to access even basic financial services as they are constantly overlooked by the big banks. What sets Novo apart is a fundamentally different approach to helping small businesses succeed. Instead of opting for incremental change, Novo built its banking platform from the ground up so that it could not just deliver a great digital banking experience, but actually deliver Novo financial products to a customer base that is yearning for them. At Stripes, we only invest in companies building amazing products, and Novo’s rave reviews, strong retention, and incredible growth make it clear it has built something that small businesses love.”
“This will help reduce the cash flow friction and implement technologies in banking and engineering back-end operations to foster advancement in the system,” Michael Rangel, CEO and Co-founder of Novo, said in the press release.
“With this additional funding, Novo will take a huge leap forward in improving cash flow for small businesses. In the coming months and years, our small business customers will be able to access their funds faster than they ever thought possible,” he added.
Established by Tyler McIntyre and Michael Rangel, Novo models itself as a customer-first banking platform that is aimed at giving users banking flexibility. It claims that users can create a business checking account digitally within minutes, with no minimum balance requirements, hidden fees, or paperwork. It also offers free business checking and debit card access.
Michael added, “After speaking with thousands of our more than 150,000 customers over the last few years, one theme keeps coming up: the more you can help a small business remove all red tape and friction around cash flow, the better off it is for that business.”
“For small business owners, the technology that powers their digital banking platform should fade into the background,” said Tyler McIntyre, CTO and Co-founder of Novo.
Novo’s latest funding round comes at a time of significant growth for the company. It has surpassed $5 billion in lifetime transactions — processing more than $4 billion in transactions in 2021 alone, and entering 2022 with a run-rate transaction volume of more than $7 billion.
Ajar Upadhyay, Director of Operations – India, Novo, said, “At Novo, we have support operations in India across Gurugram, Ahmedabad, and Bengaluru. After successfully securing Series A and B funding from our investment partners, we are focusing on the next expansion step, that is, to hire 200+ talented workforce from middle and top-level management in banking and engineering roles in India for the next six months and build an organisation that’s motivated and growing and accomplish new milestones in India,”
