Finom, a digital bank for small- and medium-sized businesses (SMBs), was founded in Amsterdam. They’re in the midst of a coordinated push. They’ve raised €92.7 million (roughly $105 million) in growth investment led by General Catalyst’s Customer Value Fund. The funding will allow Finom to expand its product range and strengthen its foothold throughout Europe. Immediately after its creation in 2020, the bank raised close to €190 million (about $214 million) of investments overall.
Finom, which was founded with the intention of serving the needs of SMBs. It has been proven successful at attracting well over 100,000 businesses throughout Germany, France, Spain, the Netherlands, and Italy. The bank has achieved positive unit economics in each of the markets in which it operates, providing strong evidence of a sustainable business model. Revenue generation is largely accomplished through transaction-based fees tied to narrow services. In addition, Finom has an attractive cashback program that further encourages customers to engage.
Beyond its traditional banking business, Finom has recently broadened its offering. In March, the bank expanded into direct lending, using the AI-powered credit scoring engine it developed to evaluate borrowers’ creditworthiness. The credit offering has recently launched in the Netherlands. We’re looking to roll it out much further across Europe by the end of the year.
Aside from their recent cooperation with Microsoft, in early February Finom launched a new “autonomous AI accounting agent” for entrepreneurs and freelancers across Europe. This innovative tool aims to streamline financial management for its users, further solidifying Finom’s position as a leader in digital banking solutions.
Finom made news last month by naming Alessandro Camilotti its new Chief Financial Officer. Camilotti has been the design lead on numerous urban design and planning initiatives. Prior to that, he was the EU head of finance and analytics for Klarna.
Zeynep Yavuz, a partner at General Catalyst, expressed confidence in Finom’s potential for growth, stating that the bank has “shown strong execution in a market that is still deeply underpenetrated.” For example, she pointed out Finom’s proprietary anti-money laundering and know-your-customer engine as a clear differentiator, improving compliance while optimizing customer experience.
Kos Stiskin, a representative from Finom, emphasized the importance of their current strategies: “Our core operations are generating positive cash flow, and all new investments and funding go directly toward attracting new clients.”
As Finom continues to evolve in the competitive landscape of challenger banks, it faces direct competition from other players such as Qonto, a Paris-based bank. Finom clearly has innovative offerings to bring to the table and a solid growth strategy. Accordingly, it is well-placed to capitalise on the growing demand for digital banking services from SMBs across Europe.