Novo has closed a Series A round of $40.7 million and intends to use the fund for growing its business and its platform. However, the company failed to disclose its valuation. Valar Ventures led the funding with Crosslink Capital, Rainfall Ventures, Red Sea Ventures, and BoxGroup.
Originally founded in New York in 2018 but now based out of Miami, Novo has an SMB customer base of 100,000. It defines SMB as businesses that make between $25,000 and $500,000 in annualized revenues.
Novo is a bank for small businesses. The Neobank is building services targeting small businesses. The company has gained many tractions in recent years and has seen $1 billion in lifetime transactions.
A culmination of factors can be attributed to the growth of the Neobank, especially this year. Two notable factors are the pandemic and BBVA shutdown of Azlo, its small business banking service. The platform's customer base increased to 24,000 in 2021 compared to 5,000 at the end of 2019.
Andrew McCormack, a founding partner at Valar Ventures, said, "The ability of the Novo team to grow the company rapidly during a year where businesses have faced unprecedented challenges is impressive."
"Novo tripled its small business customer base in the first half of 2021! Their custom infrastructure and banking platform put them in a prime position to expand their services at an even faster pace as we come out of the health crisis. All of us at Valar Ventures are excited to join this team," he added.
Novo will use the latest investments to continue growing its business and its platform. To quote Michael Rangel, CEO and co-founder of Novo.
"We're able to see this is your balance and what you should expect," he said. "The next frontier is to marry the incoming with outgoing. We're using the funding to build that, and it's on the roadmap in the next six months."