Software January 11, 2022
The Future of Small Business Banking: Our Investment in Novo
Small businesses are at the heart of the US economy, with over 30 million small businesses that collectively employ more than 60 million people. And the small business economy is growing – a record of 4.4 million new businesses were launched in the US in 2020 in spite of the global pandemic.
However, innovation in financial services has not kept up with the needs of modern small business owners. While consumer banking has been revolutionized by neo-banks like Chime and Revolut who proved that better products and more transparency can rapidly gain mass adoption, there has been very little innovation built for your average sole proprietorship or main-street merchant. These businesses, the heart of the US economy, are left to rely on the legacy banking system and all that comes with it: in-person account openings, high monthly maintenance and overdraft fees, and poor or no customer service. On top of that, most legacy banks won’t offer these business owners access to credit, forcing them to use personal cards to manage business cash flow.
Novo is a banking platform that is designed to serve as the financial hub for small businesses across all industries. Novo offers customers a business checking account with a delightful web and mobile UI, along with virtual/physical debit cards, invoice management, bill pay, ATM withdrawals, and international payments capabilities without any hidden fees. And unlike traditional banks that require a plethora of paper documentation and an in-person branch visit to open an account, Novo’s streamlined application and onboarding process is fully digital and largely automated – business owners can open an account in minutes.
Novo has built an ecosystem of robust integrations with key vendors like Quickbooks, Stripe, and Shopify. A centralized dashboard provides businesses a single pane of glass to track and manage their financial health holistically, saving time and simplifying financial management for busy entrepreneurs. And Novo has built much of its core product infrastructure in-house, which will enable it to maintain a rapid pace of product development and launch new products like BNPL while keeping costs low for its customers.
Customers raved about their ability to manage their entire business from a single platform, and we believe that Novo has an immense opportunity to continue building out a comprehensive business management platform for small businesses.
Stripes Invests in Novo’s Series B:
When we first met Michael, Tyler, and the Novo team, we were immediately impressed with their deep understanding of the pain points faced by small businesses. They clearly understood what a best-in-class banking application for small businesses would look like, and their incredible traction among business owners is a testament to the product-market fit they have already found. Unlike some other neo-banks, Novo has developed much of their core product infrastructure in-house which will enable them to continue their rapid pace of product development and better serve their customers. In speaking with Novo’s customers, we consistently heard top-notch feedback on the quality of Novo’s product as well as Novo’s excellent customer service. Customers raved about their ability to manage their entire business from a single platform, and we believe that Novo has an immense opportunity to continue building out a comprehensive business management platform for small businesses.
Stripes is thrilled to partner with Novo as they create a revolutionary banking platform for small businesses. We are honored to welcome Novo to the Stripes family, and we look forward to working alongside the team as they continue building a market-defining platform.