Novo, the powerfully simple small business banking platform, today announced that the company has raised $90 million in Series B funding at a $700 million valuation. Stripes led the round, with 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.
“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 that business is,” said Michel Rangel, CEO and co-founder of Novo. “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.”
With the additional $90 million in funding, Novo will build out modern lending capabilities, integrations, and proprietary products that allow small businesses to send and receive money more quickly. These new features will add to the series of enhancements Novo announced in 2021:
- The Novo App Marketplace: Novo customers can use the Novo App Marketplace to customize their account like never before. The Novo App Marketplace lets businesses centralize their finances, giving them instant visibility into everything from e-commerce sales, to pending invoices, and cash-on-hand. The Novo App Marketplace also allows small businesses to take advantage of dozens of native integrations, and connect to over 1,000 applications and tools that they already use.
- Invoicing: Customers can create and manage an unlimited number of invoices on the Novo platform. Novo Invoicing also enables customers to process credit card payments via their payment processor integrations.
- Cash flow Insights: Customers can quickly review their top income and spending categories, compare income from different time periods, and review cash flow and inbound transactions. This functionality reduces the need for some businesses to leverage complex account systems like Quickbooks.
- Reserves: Customers can add up to five Reserves to their account, and allocate those funds for different expenses they want to save for, from estimated taxes to large capital expenditures.
“Despite being the heart of the U.S. economy, the more than 30 million small businesses in the U.S. have always struggled to access even basic financial services as they are constantly overlooked by the big banks,” said Saagar Kulkarni, Partner at Stripes who will be joining Novo’s Board of Directors. “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 de 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.”
Novo’s latest funding round comes at a time of significant growth for the company. Novo 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. Novo also opened its new headquarters in Miami, and received multiple awards, including CNBC’s “Best Business Checking Accounts,” Money Magazine’s “Best Business Checking Accounts of 2021,” and The Banker’s “Most Innovative Bank in North America.”
“For small business owners, the technology that powers their digital banking platform should fade into the background,” said Tyler McIntylre, CTO and co-founder of Novo. “As we look towards the rest of 2022 and beyond, one area we’re particularly excited about is providing short-term capital for reducing cash flow friction, and implementing technologies that can automate this process.”