Novo, a U.S.-based small business challenger bank, announced last week it secured $4.8 million through its seed funding round, which was led by Crosslink Capital with participation from Red Sea Ventures, Hack VC, RRE, Rainfall, and the Stanford Law School Venture Fund.
Founded in 2016, Novo describes itself as a banking platform that provides better business deposit accounts to companies and is powered by a network of FDIC-insured community banks. The banking group noted that it is bringing small business banking into the modern age with “easy-to-use” tools for founders on the go. Tyler McIntyre, Co-Founder and CTO of Novo, stated:
“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. 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.”
Speaking about the funding, Michael Rangel, Co-Founder and CEO of Novo, commented:
“We couldn’t be happier with the support of Crosslink Capital, Jim Feuille, and the rest of the great investors in the syndicate. 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.”
Jim Feuille, Venture Partner at Crosslink Capital and Novo Board Member, added:
“Their value proposition is simple yet brilliant. Novo brings low-cost deposits in exchange for bank sponsorship. 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.”