SMBs across Europe reportedly face a €400 billion financing gap. Despite being critical to the continent’s success, this sector generates close to 60% of total gross value added and employs over 90 million people. Realising the importance of small businesses, several startups have come forward to help SMBs access finances. The most recent startup operating in this sector is London startup Mimo.
Likewise, Berlin-based fintech finmid challenges the one-size-fits-all approach of banks by offering a more efficient and tailored, digital-first solution that a new generation of entrepreneurs has come to expect.
Raises €35M funding
In a recent development, finmid has raised €35 million in early-stage equity funding from Blossom Capital, which invested in TheyDo, Earlybird VC (invested in Lilium and Greenlyte), and N26-founder Max Tayenthal. The funding comes as the company recently partnered with Wolt, a European local commerce platform.
The new funding will be used to continue expanding and onboarding customers across core European markets while offering platforms more financing options and a smoother user experience.
Ophelia Brown, Founder and Managing Partner of Blossom Capital said: “For B2B software platforms to stay competitive, they need to be leveraging financial services to better serve and retain their customers, and increase their margins. The most innovative and forward-thinking businesses in Europe understand the importance of this and are increasingly turning to finmid as the best partner to achieve these ambitions. It’s a huge opportunity that finmid’s founders have the track record and credibility to deliver and we’re excited to join Max, Alex and their team on their mission.”
Vincent Ho-Tin-Noe, CPO at Wolt said: “We’re constantly looking for ways to support our merchant partners and help them succeed. Together with finmid, we’re able to provide easy and flexible access to additional financing – helping our partner develop their businesses, or have a safety net during tough times. The feedback we have received has been extremely encouraging, and we’re excited to see what kind of value we can create with the program moving forward.”
Ex-N26 employees’ brainchild
Founded in 2021 by former N26 employees, Max Schertel and Alexander Talkanitsa, finmid is reinventing banking for small businesses by enabling B2B software companies to offer financing solutions to their customers, quickly and without risk. With just a few lines of code, it partners can offer a growing range of capital and payment solutions their SMBs need to scale.
With finmid, thousands of growing businesses can access financing without having to fill in multiple forms, submit to convoluted processes, and low approval rates. They can access funds within 24 hours directly from the B2B platforms they use daily. Decisions are based on real-time data and expert knowledge of any given sector, which mainstream and challenger banks do not have. The advantage for the marketplace is that it gains new revenue streams and creates a sustainable way to retain customers.
How does finmid work?
finmid offers financing solutions tailored for European SMBs through two key products.
Capital: A solution for B2B software platforms that gives small & medium businesses immediate access to future revenues based on their sales history. This solution has been implemented with local commerce platform, Wolt, and other software providers to enable businesses in the property and hospitality sectors to get cash advances for their future earnings.
B2B Payments: A solution that allows partners – Frupro, the marketplace for fruits and vegetables; recyclables marketplaces Safi, Metycle, and Romco, timber marketplace VonWood, Vanilla Steel’s metal marketplace and more to finance trading and provide essential working capital for buyers.
Max Schertel, Co-Founder of finmid said: “For hundreds of years, banks served as outposts where local businesses could get bespoke banking solutions. In the last few decades of consolidation, banking has become distant and impersonal, leaving small and medium-sized businesses behind. At finmid, we bring business financing back to where businesses are run. With just a few lines of code, finmid enables any B2B software platform to offer financing to their customers, building on existing relationships to fuel their business growth.”
Alexander Talkanitsa, Co-Founder of finmid added: “Traditional banking will no longer be the primary source for business financing. Banks still have the largest pool of capital but struggle to deploy it efficiently. It’s time for a new way of banking. We believe B2B software platforms are the future distribution channel for financial services due to their relationships with thousands of businesses. Moreover, these platforms have access to real-time data, enabling streamlined user interactions. By leveraging the extensive reach, data insights, and relationships these platforms maintain, alongside financial capital, we’re looking at a modern way of business financing.”
