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

While some may find it challenging to obtain financing, Europe’s burgeoning startups are consistently drawing investor interest.

The latest beneficiary of this investment enthusiasm is Finom, an Amsterdam-based challenger bank that’s in its fifth year and focuses on small and medium-sized businesses across Europe. The company, which anticipates a revenue doubling in 2024, has successfully concluded a €115 million Series C equity round (around $133 million), as reported exclusively by TechCrunch. This comes just a few weeks after securing $105 million in growth funding from General Catalyst, its financial partner since 2021.

Finom’s business strategy revolves around offering European SMBs a financial platform that combines banking, invoicing, and a growing array of features, including AI-driven accounting. CEO Andrey Petrov stated, “In theory, entrepreneurs don’t need an accountant at all.”

The startup’s growth aspirations reflect this vision. Although Petrov describes Finom’s target to achieve one million business customers by the end of 2026 as inspirational and not yet finalized, this new funding propels that goal closer to fruition.

The belief that Finom can seize a substantial share of Europe’s 26 million SMBs is clear in its Series C. The round was led by AVP (previously AXA Venture Partners), with new investor Headline (formerly e.ventures) participating through Headline Growth. Current investors like Cogito Capital, General Catalyst, and Northzone also contributed.

Despite this upward trend, the startup may find it easier to attract clients from traditional banks—its present strategy—than from rival fintechs.

Even with the Series C elevating its total funding to roughly $346 million, Finom trails behind Monzo, N26, Revolut, and Wise, which have all raised over $1 billion. Its funding level is more comparable to the about $700 million amassed by its closest competitor, French unicorn Qonto, though the comparison isn’t exact.

What makes Finom’s funding approach particularly captivating is its unconventional nature. Unlike traditional VCs, General Catalyst opted not to take an equity stake in Finom through this unique funding; the capital from its Customer Value Fund (CVF) is strictly earmarked for growth, from which it expects to recover its investment.

Together with the Series B, this non-traditional funding method would have been enough for the Dutch firm to attain profitability, according to chairman and co-founder Kos Stiskin. However, Finom was also eying an equity raise by year-end, aspiring for a “good and nice” new valuation. What it didn’t foresee was completing both fundraising efforts in close succession.

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

Timing may have played a favorable role for Finom. The company does not publicly share its unit economics—aside from a user base of 125,000—and General Catalyst’s scrutiny likely heightened investor interest and sped up fundraising. This vote of confidence—and the urgency to recoup its investment—may have prompted investors to accelerate their contributions.

Beyond signaling effects, the Customer Value Fund financing Finom’s marketing initiatives without equity dilution appears advantageous for its Series C investors, including General Catalyst.

Nonetheless, the Series C will also back riskier endeavors beyond customer acquisition through marketing.

According to Petrov, some of the funding may be allocated toward strategic and opportunistic acquisitions aimed at expanding the customer base or enriching the product lineup. This indicates a shift in strategy, as Finom has only made one acquisition to date—the British cross-border payment service Kapaga in 2022, while considering its entrance into the U.K. market.

Since then, Finom has focused on some of Europe’s largest markets, which it identifies as having more potential than the U.K. The company believes these markets feature fewer challenger banks serving SMBs and that traditional banks are inadequately addressing the needs of small businesses.

Like many neobanks, Finom primarily operates under an electronic money institution (EMI) license in most of its key markets: the Netherlands, France, Italy, and Spain (though not in Germany, where it collaborates with Solaris, which holds a full banking license).

Despite these licensing limitations, it has successfully initiated lending in the Netherlands, viewing it as a pilot ground for its credit offerings—which Petrov asserts are vital for any fintech and for business customers.

This lending initiative supports Finom’s goal to diversify its product offering both horizontally—by adding deposits and loans—and vertically, “starting from a banking account to tax payments, reports, and so on.” AI is a significant element here, extending beyond just product offerings.

The company is also leveraging AI internally. With a workforce of 500, it plans to make various business and tech-related hires, though not aiming for a significant operational scale-up. “We’re adding some staff, but primarily we’re integrating new types of AI agents for internal functions,” Petrov noted. “Thus, we’re hiring less than expected, and we’re observing substantial output from employing AI agents to automate routine tasks.”

Finom’s leadership structure has evolved as well. The distribution of roles among the four co-founders has shifted over the years, with Petrov now serving as the sole CEO—a position he previously shared with Yakov Novikov, who is now an advisor alongside Oleg Laguta.

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