Finom Raises €115M Amidst Booming European Fintech Market for SMBs

Despite hurdles in obtaining financing, new startups across Europe continue to capture the interest of investors.

Finom, a challenger bank based in Amsterdam and now in its fifth year, has recently leveraged this investment wave. The firm is dedicated to assisting small and medium-sized enterprises (SMEs) throughout Europe. They anticipate doubling their revenue by 2024 and have successfully secured €115 million (approximately $133 million) in a Series C equity round, as reported exclusively by TechCrunch. This follows a prior growth investment of $105 million from General Catalyst, a partner since 2021.

Finom’s business model is centered on providing a holistic financial platform customized for European SMEs, which includes banking solutions, invoicing, and AI-enhanced accounting tools. CEO Andrey Petrov stated, “In theory, entrepreneurs don’t even require an accountant.”

This ambitious growth strategy reflects Finom’s overarching vision. Petrov highlighted that the company aims to onboard one million business clients by the end of 2026, a goal that seems increasingly achievable with the recent influx of funding.

The Series C funding round, led by AVP (formerly AXA Venture Partners), emphasizes Finom’s potential to capture a significant share of Europe’s 26 million SMEs. New investor Headline (formerly e.ventures) joined through Headline Growth, along with existing backers like Cogito Capital, General Catalyst, and Northzone.

Nonetheless, attracting clients from traditional banks remains a challenge, and competing with established fintech companies could be more daunting.

With the Series C funding elevating the total to about $346 million, Finom still trails behind competitors such as Monzo, N26, Revolut, and Wise—all of which have raised over $1 billion. Its total is also closer to the roughly $700 million garnered by nearest rival, the French unicorn Qonto, although these figures are not entirely equivalent.

What differentiates Finom’s funding strategy is its unique approach. General Catalyst chose not to take an equity stake in Finom during this round; instead, the resources from its Customer Value Fund (CVF) are dedicated specifically to growth, with an expectation of recouping the investment.

Considering the Series B, Finom’s innovative funding strategy sets the company on a trajectory toward potential profitability, as noted by chairman and co-founder Kos Stiskin. However, Finom is also planning to seek additional equity financing by year-end, aiming for a compelling new valuation. They did not anticipate completing both funding rounds so swiftly.

“One took longer than expected, while the other was much quicker than anticipated,” Stiskin told TechCrunch. He declined to disclose the updated valuation, mentioning only that it has doubled compared to the undisclosed figure associated with its $54 million Series B in 2024.

Finom’s timing may have been opportune. While the firm has not revealed its unit economics—beyond noting a user base of 125,000—General Catalyst’s in-depth due diligence likely heightened investor interest and accelerated the fundraising process. This support, along with the urgency to recover their investment, likely encouraged swift action from investors.

Additionally, the Customer Value Fund enables Finom to concentrate on marketing initiatives without diluting equity, which benefits its Series C investors, including General Catalyst.

However, the Series C will also be allocated to more ambitious projects beyond mere customer acquisition through marketing.

As Petrov indicated, part of the funding may be directed toward strategic acquisitions to expand its customer base or enhance its product offerings. This reflects a strategic pivot, as Finom has only executed one acquisition to date—the British cross-border payment service Kapaga in 2022—while planning to enter the U.K. market.

Since then, Finom has targeted larger European markets, deeming them more promising than the U.K. They assert that these regions have fewer challenger banks catering to SMEs and that traditional banks do not adequately meet the needs of small businesses.

Similar to many neobanks, Finom operates primarily under an electronic money institution (EMI) license in key markets, including the Netherlands, France, Italy, and Spain (it partners with Solaris in Germany, which has a full banking license).

Despite these licensing constraints, it successfully launched lending services in the Netherlands, using it as a testing ground for credit offerings, which Petrov believes are essential for both fintech and business clients.

This lending initiative aligns with Finom’s objective to broaden its product portfolio both horizontally—adding deposits and loans—and vertically, “ranging from banking accounts to tax payments, reports, and beyond.” AI plays a crucial role in this expansion, reaching beyond just product development.

The company also leverages AI in its internal operations. With a workforce of 500, it plans to onboard additional business and tech personnel but does not foresee significant operational growth. “We’re hiring some staff, but mainly we’re integrating new types of AI agents for internal roles,” Petrov commented. “Consequently, we’re hiring less than anticipated while achieving substantial output from these AI agents in automating routine tasks.”

Finom’s leadership structure has evolved over time. The roles among the four co-founders have transitioned, with Petrov now serving as the sole CEO—a role he previously shared with Yakov Novikov, who now acts as an advisor alongside Oleg Laguta.

The trio previously founded the Russian digital bank Modulbank. However, Finom’s current focus is on Europe and its entrepreneurs, who, according to Stiskin, represent “the backbone of the European Union economy.”