Photo: Novo
New York-based Novo announced it has raised $4.8 million in venture seed financing in order to make banking easier and accessible for small businesses by launching no-fee and FDIC-insured digital banking. Ever since Novo launched in September 2018, startup founders and small business owners have been able to apply for business checking accounts in under ten minutes securely with no minimum balance requirements. Crosslink Capital, Red Sea Ventures, Hack VC, RRE, Rainfall, and the Stanford Law School Venture Fund participated in this round of funding.
“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,” said Novo co-founder and CTO Tyler McIntyre. “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.”
Novo provides business banking products without any paperwork or hidden fees. And getting a Novo account gives customers access to a free business checking account with debit card access managed through a mobile app. This platform is enabled by its community bank partner Middlesex Federal Savings. And Novo can be integrated with Slack, Stripe, Xero, Zapier, and TransferWise.
“Their value proposition is simple yet brilliant. Novo brings low-cost deposits in exchange for bank sponsorship,” added Crosslink Capital venture partner and Novo Board Member Jim Feuille. “Essentially becoming a decentralized 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.”
And Novo has been able to leverage the abilities of a nationally chartered and regulated bank while building proprietary technology to create the bank account modern businesses need. This includes everything from reviewing balances and transaction monitoring to process free bank transfers and checks.
“We couldn’t be happier with the support of Crosslink Capital, Jim Feuille, and the rest of the great investors in the syndicate,” explained Novo co-founder and CEO Michael Rangel. “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.”
