Finom Finds Raising $50M “Quite Easy” despite Tough Climate

by Damian Chmiel
  • The payment services provider for small businesses has already raised over €100 million.
  • The financing has come at a time when European fintech firms are struggling to find investors.
Finom Co-Founder Kos Stiskin
Finom Co-Founder Kos Stiskin
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The Dutch banking provider Finom has raised €50 million in a Series B funding round co-led by an existing investor General Catalyst and a new investor Northzone. This latest funding brings Finom's total funding to over €100 million since its establishment in 2019.

Finom Raises €50 Million

Finom offers small and medium enterprises (SMEs) banking services, including accounts, cards, payments, invoicing, and foreign exchange .

Despite the current challenging economic climate, the funding round was successfully secured. Finom's Co-Founder, Kos Stiskin, stated: "It was quite easy to attract" investors due to the company's strong metrics and market opportunity in the SME banking sector. Finom chose to partner with General Catalyst and Northzone based on their level of analysis and support offered to Finom.

"In this fast-evolving landscape, Finom is committed to becoming the leader in the EU through adapting our unified platform infrastructure, while paying close attention to the unique characteristics of each country we serve," Stiskin added.

Currently employing around 250 people, Finom aims to double its headcount to 500 in 2024. The company sees ample room for growth, with neobanks having less than 3% market penetration so far among European SMEs.

“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,” commented the Co-Founder of Finom.

Other existing investors, including Cogito Capital, Entrée Capital, FJLabs, s16vc, and Target Global, also participated in the latest funding round. The company currently operates in the Netherlands, Cyprus, Germany, France, Italy, Spain, Belgium, and Poland. The company plans to use the new funding to expand its product offerings, increase marketing efforts, and grow its accounting services.

The Challenges of Fintech Financing

While Finom reports ease in securing funding, other neobanks and fintechs face difficulties attracting investors under the current conditions. The latest "Pulse of Fintech" report from KPMG underscores a significant downturn in fintech investments in 2023. Global investments in fintech dropped to $113.7 billion in 2023 from $196.3 billion in 2022, with the number of deals decreasing to 4,547, the lowest since 2017.

This decline in investment and deal activity reflects a broader cooling of investor sentiment towards fintech, reaching a five-year low. Factors contributing to this downturn include persistent high interest rates, geopolitical tensions in regions like Ukraine and the Middle East, falling fintech valuations, and a challenging environment for exits.

Contrasting with the global downtrend, a report from Innovate Finance released earlier this year highlights a unique case where the United Arab Emirates saw a substantial increase in fintech funding, nearly doubling with growth of 92%. This exception to the general trend indicates regional variations in the fintech investment landscape amidst a challenging global backdrop.

The Dutch banking provider Finom has raised €50 million in a Series B funding round co-led by an existing investor General Catalyst and a new investor Northzone. This latest funding brings Finom's total funding to over €100 million since its establishment in 2019.

Finom Raises €50 Million

Finom offers small and medium enterprises (SMEs) banking services, including accounts, cards, payments, invoicing, and foreign exchange .

Despite the current challenging economic climate, the funding round was successfully secured. Finom's Co-Founder, Kos Stiskin, stated: "It was quite easy to attract" investors due to the company's strong metrics and market opportunity in the SME banking sector. Finom chose to partner with General Catalyst and Northzone based on their level of analysis and support offered to Finom.

"In this fast-evolving landscape, Finom is committed to becoming the leader in the EU through adapting our unified platform infrastructure, while paying close attention to the unique characteristics of each country we serve," Stiskin added.

Currently employing around 250 people, Finom aims to double its headcount to 500 in 2024. The company sees ample room for growth, with neobanks having less than 3% market penetration so far among European SMEs.

“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,” commented the Co-Founder of Finom.

Other existing investors, including Cogito Capital, Entrée Capital, FJLabs, s16vc, and Target Global, also participated in the latest funding round. The company currently operates in the Netherlands, Cyprus, Germany, France, Italy, Spain, Belgium, and Poland. The company plans to use the new funding to expand its product offerings, increase marketing efforts, and grow its accounting services.

The Challenges of Fintech Financing

While Finom reports ease in securing funding, other neobanks and fintechs face difficulties attracting investors under the current conditions. The latest "Pulse of Fintech" report from KPMG underscores a significant downturn in fintech investments in 2023. Global investments in fintech dropped to $113.7 billion in 2023 from $196.3 billion in 2022, with the number of deals decreasing to 4,547, the lowest since 2017.

This decline in investment and deal activity reflects a broader cooling of investor sentiment towards fintech, reaching a five-year low. Factors contributing to this downturn include persistent high interest rates, geopolitical tensions in regions like Ukraine and the Middle East, falling fintech valuations, and a challenging environment for exits.

Contrasting with the global downtrend, a report from Innovate Finance released earlier this year highlights a unique case where the United Arab Emirates saw a substantial increase in fintech funding, nearly doubling with growth of 92%. This exception to the general trend indicates regional variations in the fintech investment landscape amidst a challenging global backdrop.

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