Finom Secures €115 Million Series C Funding to Propel Growth in European SMB Market
In an era where capital may be constrained for various startups, Finom, a rapidly expanding challenger bank based in Amsterdam, has successfully attracted significant investor interest. The firm recently announced the completion of a €115 million (approximately $133 million) Series C funding round, according to exclusive information from TechCrunch. This latest round follows closely on the heels of a $105 million growth investment raised from General Catalyst, a supporter of Finom since 2021.
A Comprehensive Financial Solution for European SMBs
Finom has positioned itself as a strong contender in the financial services landscape, focusing primarily on small and medium-sized businesses (SMBs) across Europe. The bank’s innovative platform integrates banking, invoicing, and an array of expanding features, including artificial intelligence (AI)-enhanced accounting services. CEO Andrey Petrov noted that the platform aims to reduce reliance on traditional accountants, stating, "Theoretically, entrepreneurs don’t need to have an accountant at all."
The startup has set ambitious growth objectives, targeting one million business customers by the end of 2026. Although Petrov emphasized that this target is motivational rather than fixed, the recent funding undoubtedly improves the likelihood of achieving this goal.
Strategic Backing from Notable Investors
The Series C round was spearheaded by AVP (formerly AXA Venture Partners), with contributions from new partner Headline (formerly e.ventures) via Headline Growth. Additionally, existing investors—including Cogito Capital, General Catalyst, and Northzone—also participated, reflecting strong investor confidence in Finom’s business model.
Despite its positive momentum, Finom faces challenges in winning over clients from established legacy banks, which is currently part of its strategy. While the firm has raised approximately $346 million to date, this funding amount trails behind competitors such as Monzo, N26, Revolut, and Wise, which have all surpassed $1 billion in funding. The capital raised is more aligned with the roughly $700 million secured by French rival Qonto, although direct comparisons are complex.
Unique Funding Approach Enhances Financial Flexibility
A noteworthy aspect of Finom’s funding strategy is its unconventional approach. Unlike typical venture capital firms, General Catalyst did not acquire equity in Finom through its recent funding; instead, it utilized its Customer Value Fund (CVF) specifically for growth initiatives. This structure allows General Catalyst to recuperate its investment without diluting ownership, which enhances the company’s financial flexibility.
Chairman and co-founder Kos Stiskin indicated that the combination of Series B and non-traditional funding rounds could have positioned Finom for profitability. The startup initially planned to seek further equity financing by year-end and aimed for a favorable valuation. To their surprise, the two funding rounds closed in rapid succession, with Stiskin remarking, “One took longer than expected, and one was much faster than expected.” He opted not to disclose the updated valuation, only mentioning it was double that of the previously undisclosed valuation from the $54 million Series B funding round in 2024.
Growth Prospects and Strategic Acquisitions
The timing of these funding rounds appears to have favored Finom, as investor confidence surged following General Catalyst’s thorough review of the company’s operations. Given that Finom has not publicly disclosed detailed financial metrics other than its customer base of 125,000, this endorsement likely accelerated fundraising efforts.
The Series C funding will also enable Finom to embark on more ambitious initiatives, such as potential strategic acquisitions that could enhance its customer base or expand its product offerings. This marks a shift from Finom’s previous acquisition strategy; until now, it had only acquired Kapaga, a UK-based cross-border payment service, in 2022.
Shifting its focus from the UK to larger European markets, Finom targets regions where it perceives unmet needs among SMBs due to insufficient support from traditional banks.
Operational and Product Innovations
Operating primarily under an electronic money institution (EMI) license, Finom is currently focusing on key markets like the Netherlands, France, Italy, and Spain, with plans to introduce lending services in the Netherlands as a pilot program. Petrov views the expansion of credit offerings as essential for fintech companies and their business clients.
In addition to expanding its product line—offering deposits and loans—Finom is also incorporating AI to streamline internal processes. The company, which employs around 500 individuals, is optimizing operations through the integration of AI agents while managing new hires cautiously.
Leadership Evolution and Future Outlook
Over the years, Finom has seen changes in its leadership structure. Petrov now stands as the sole CEO, having previously shared this role with Yakov Novikov, who now serves as an advisor along with co-founder Oleg Laguta. The trio’s past experience in establishing Russian digital bank Modulbank underpins Finom’s current endeavors focused on supporting European entrepreneurs, whom Stiskin recognizes as integral to the EU’s economic framework.
With continued investor backing and a clear strategic focus, Finom is well-positioned to capitalize on emerging opportunities in the European fintech landscape.
