Novo, a digital-only bank for US small businesses, has raised $4.8 million in a funding round led by Crosslink Capital with participation from Red Sea Ventures, Hack VC, RRE, Rainfall, and the Stanford Law School Venture Fund.
Launched in September last year with support from FDIC-insured Middlesex Federal Savings, Novo gives customers access to a free paperless business checking account with debit card access, all managed through a mobile app.
Novo co-founder and CTO Tyler McIntyre says Novo aims to become the “financial watchtower for small business” offering data analytics through multiple partners and integrations with Slack, Stripe, Zapier, and leading accounting software to give users real-time insights and notifications on the financial health of their small businesses.
“Today everything from your toaster to your thermostat can be integrated into your business’ workflow, and we think your bank should be able to do the same,” he says. “Traditional banks don’t understand the needs of founders and are held back by legacy technology. We built Novo from the ground up allowing us to deploy new features every week and integrate into the tools you already use for your business. That’s the way banking should be.”
Jim Feuille, venture partner at Crosslink Capital describes Novo's value proposition as "simple yet brilliant".
"Novo brings low-cost deposits in exchange for bank sponsorship,” he says. “Essentially becoming a decentralised technology and marketing arm for banks by recreating the way they acquire and retain customers, which is why we decided to lead the round with $3.5 million to scale their growth.”
Michael Rangel, co-founder and CEO, says: “Our focus will be on onboarding the many account requests on our waitlist, as well as creating strategic partnerships with other value-added products and services to enhance the Novo ecosystem and customer experience in addition to expanding our team.”