Finom Raises €115M in Funding Amid Booming European Fintech Market for SMBs

Despite difficulties some face in obtaining funding, emerging startups across Europe continue to draw attention from investors.

The latest beneficiary of this investment interest is Finom, a challenger bank based in Amsterdam, which is entering its fifth year and is focused on aiding small and medium-sized enterprises (SMEs) throughout Europe. The company anticipates doubling its revenue in 2024 and has successfully wrapped up a €115 million Series C equity round (around $133 million), as exclusively reported by TechCrunch. This follows a $105 million growth investment from General Catalyst, its financial partner since 2021.

Finom’s business model revolves around providing European SMEs with a comprehensive financial platform that combines banking, invoicing, and various features, including AI-driven accounting. CEO Andrey Petrov stated, “In theory, entrepreneurs don’t need an accountant at all.”

The startup’s ambitious growth plans showcase this vision. Petrov highlighted Finom’s goal of reaching one million business customers by the close of 2026, which remains aspirational yet increasingly feasible following this new funding.

The opportunity for Finom to capture a substantial share of Europe’s 26 million SMEs is clear from its Series C round. This funding round was led by AVP (formerly AXA Venture Partners), with new investor Headline (previously e.ventures) contributing via Headline Growth. Existing backers such as Cogito Capital, General Catalyst, and Northzone also participated.

Despite this upward trend, the startup might find it simpler to lure customers from traditional banks—its current focus—rather than from existing fintech rivals.

While the Series C increases its total funding to about $346 million, Finom still trails behind Monzo, N26, Revolut, and Wise, all of which have raised over $1 billion. Its funding amount is closer to the roughly $700 million amassed by its nearest rival, French unicorn Qonto, although the comparisons are not entirely equivalent.

What makes Finom’s funding strategy particularly intriguing is its unconventional approach. General Catalyst chose not to take an equity stake in Finom through this arrangement; instead, capital from its Customer Value Fund (CVF) is solely aimed at growth, with the expectation of recouping its investment.

With the addition of Series B, Finom’s unique funding strategy could have allowed the Dutch firm to reach profitability, according to chairman and co-founder Kos Stiskin. Nevertheless, Finom was also planning to raise equity by the year’s end, seeking an attractive new valuation. What it did not foresee was completing both fundraising phases in rapid succession.

“One took longer than expected, while the other was much faster than we anticipated,” Stiskin remarked to TechCrunch. He withheld the updated valuation, merely noting that it has doubled in comparison to the undisclosed figure tied to its $54 million Series B in 2024.

Timing may have worked in Finom’s favor. The company has not publicly revealed its unit economics—aside from a user base of 125,000—and General Catalyst’s due diligence may have increased investor interest and accelerated fundraising activities. This backing—and the urgency to recover its investment—might have motivated investors to expedite their involvement.

Beyond signaling effects, the Customer Value Fund enables Finom’s marketing initiatives without diluting equity, which seems to benefit its Series C investors, including General Catalyst.

However, the Series C will also support riskier endeavors beyond customer acquisition through marketing.

According to Petrov, part of the funding might be directed towards strategic and opportunistic acquisitions aimed at expanding the customer base or enhancing product offerings. This indicates a strategic pivot, as Finom has only executed one acquisition to date—the British cross-border payment service Kapaga in 2022—while contemplating entry into the U.K. market.

Since then, Finom has focused on several of Europe’s major markets, which it perceives as more promising than the U.K. The company argues that these markets have fewer challenger banks servicing SMEs and that traditional banks are inadequately meeting the needs of small businesses.

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

Despite these licensing limitations, it has successfully begun lending in the Netherlands, treating it as a testing ground for its credit offerings— which Petrov asserts are crucial for both fintech and business customers.

This lending initiative aligns with Finom’s goal of diversifying its product portfolio both horizontally—by adding deposits and loans—and vertically, “starting from a banking account to tax payments, reports, and more.” AI plays a significant role in this expansion, extending beyond just product development.

The company is also leveraging AI for its internal operations. With a workforce of 500, it plans to make various business and tech-related hires but does not intend to undergo major operational expansion. “We’re adding some staff, but we’re primarily integrating new types of AI agents for internal tasks,” Petrov observed. “Thus, we’re hiring less than expected, but we’re seeing considerable output from the use of AI agents to automate routine functions.”

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

The trio previously founded the Russian digital bank Modulbank. However, this time, Finom is concentrating on Europe and its entrepreneurs, who, in Stiskin’s words, represent “the backbone of the European Union economy.”