Fintech

Our Investment in Finom

Building a Modern Financial Operating System for European Entrepreneurs & SMEs
Published
February 22, 2024
Share
#
min read

We are excited to announce our Series B investment in Finom. We first partnered with Finom in 2021 when we invested in the seed round. Co-founders Andrew Petrov, Kos Stiskin, Oleg Laguta, and Yakov Novikov had a vision for a new bank for entrepreneurs and small businesses in Europe. The consumer neobank revolution was already taking place, but small businesses remained underserved. Their mission was to empower entrepreneurs who were held back from even the most basic financial needs such as opening a bank account. Since then, the Finom team has successfully executed an ambitious regulatory and product roadmap to build out a full suite of localized financial services, reaching a customer base of approximately 85,000 SMEs in Germany, France, the Netherlands, and the rest of Europe. 

At General Catalyst, we have a longstanding thesis of empowering small businesses with our investments in Gusto, Hubspot, BigCommerce, Fundbox, Melio, and others. Our investment in Monzo was based on the belief that consumers prefer simplicity and choose the best-in-class software to run their lives. Entrepreneurs and business owners want the same experience from their business bank, but Europe is tracking significantly behind the UK in challenger bank market penetration within the SME segment.

There are two key reasons for this. First, simplicity is harder to deliver in SME banking. Businesses have more complex onboarding requirements and more advanced financial needs than consumers. Second, Europe is fragmented. Even though an EMI license obtained in one European country can be used to operate pan-European through a process called ‘passporting’, each country has a different IBAN, different common ways to pay (from Sofort in Germany and iDeal in the Netherlands), and different local accounting systems. This results in infrastructure playing an extremely important role in building and successfully scaling a pan-European SME financial platform. 

Herein lies Finom’s long-term vision. Finom’s founders were determined to build a pan-European company from day one, so they put the infrastructure at the front and center. They built a proprietary core banking software and fincrime tooling, acquired their Dutch EMI license, and are rapidly localizing their product offering in Germany, France, Italy, and the rest of Europe to satisfy customer needs. Reliability is their core product pillar. 

SMEs are the backbone of the European economy, representing 99% of business in the EU and accounting for more than half of Europe's GDP. We are thrilled to double down our investment in Finom and can’t wait to see them transform the financial lives of over 20 million SMEs in Europe.

Published
February 22, 2024
Share
#
min read

We are excited to announce our Series B investment in Finom. We first partnered with Finom in 2021 when we invested in the seed round. Co-founders Andrew Petrov, Kos Stiskin, Oleg Laguta, and Yakov Novikov had a vision for a new bank for entrepreneurs and small businesses in Europe. The consumer neobank revolution was already taking place, but small businesses remained underserved. Their mission was to empower entrepreneurs who were held back from even the most basic financial needs such as opening a bank account. Since then, the Finom team has successfully executed an ambitious regulatory and product roadmap to build out a full suite of localized financial services, reaching a customer base of approximately 85,000 SMEs in Germany, France, the Netherlands, and the rest of Europe. 

At General Catalyst, we have a longstanding thesis of empowering small businesses with our investments in Gusto, Hubspot, BigCommerce, Fundbox, Melio, and others. Our investment in Monzo was based on the belief that consumers prefer simplicity and choose the best-in-class software to run their lives. Entrepreneurs and business owners want the same experience from their business bank, but Europe is tracking significantly behind the UK in challenger bank market penetration within the SME segment.

There are two key reasons for this. First, simplicity is harder to deliver in SME banking. Businesses have more complex onboarding requirements and more advanced financial needs than consumers. Second, Europe is fragmented. Even though an EMI license obtained in one European country can be used to operate pan-European through a process called ‘passporting’, each country has a different IBAN, different common ways to pay (from Sofort in Germany and iDeal in the Netherlands), and different local accounting systems. This results in infrastructure playing an extremely important role in building and successfully scaling a pan-European SME financial platform. 

Herein lies Finom’s long-term vision. Finom’s founders were determined to build a pan-European company from day one, so they put the infrastructure at the front and center. They built a proprietary core banking software and fincrime tooling, acquired their Dutch EMI license, and are rapidly localizing their product offering in Germany, France, Italy, and the rest of Europe to satisfy customer needs. Reliability is their core product pillar. 

SMEs are the backbone of the European economy, representing 99% of business in the EU and accounting for more than half of Europe's GDP. We are thrilled to double down our investment in Finom and can’t wait to see them transform the financial lives of over 20 million SMEs in Europe.