While funding may be scarce for some, Europe’s fastest-growing startups still have their pick.

The latest beneficiary of that investor appetite is Finom, a five-year-old, Amsterdam-based challenger bank that targets small and medium-size businesses across Europe. The company, which claims to have doubled its revenue in 2024, just closed a €115 million Series C equity round (around $133 million), TechCrunch learned exclusively. This comes only a few weeks after it landed $105 million in growth funding from General Catalyst, its backer since 2021.

Finom’s business model centers on providing European SMBs with a financial platform that combines banking, invoicing, and a growing range of features, including AI-enabled accounting. “Because theoretically, entrepreneurs don’t need to have an accountant at all,” said CEO Andrey Petrov (on the far left in the picture).

The startup’s ambitious growth targets reflect this vision. While Petrov says Finom’s goal of having one million business customers by the end of 2026 is motivational and not set in stone, its new funding makes that target slightly more attainable.

This belief that Finom could serve a fair share of Europe’s 26 million SMBs is also reflected in its Series C. The round was led by AVP (formerly AXA Venture Partners), with participation from new investor Headline (formerly e.ventures) through Headline Growth. Existing investors Cogito Capital, General Catalyst, and Northzone also joined the round.

Despite this momentum, the startup may find it easier to win clients over from legacy banks  — its current plan — than from other fintechs.

Even after its Series C brought its total funding to roughly $346 million, Finom has far less external capital than Monzo, N26, Revolut, or Wise, which all raised more than $1 billion. Its funding to date is more comparable to the approximately $700 million raised by Finom’s closest peer, French unicorn Qonto — though the comparison isn’t perfect.

What makes Finom’s funding structure particularly interesting is its non-traditional component. Unlike typical VCs, General Catalyst took no equity in Finom with its non-traditional round; the capital from its Customer Value Fund (CVF) can only be used for growth, which is how it plans to get its money back. 

Combined with the Series B, this non-traditional funding round would have been enough for the Dutch company to reach profitability, according to chairman and co-founder Kos Stiskin (on the far right in the picture). But Finom was also hoping to raise equity by the end of the year, and get a “good and nice” new valuation in the process. What it didn’t anticipate was closing both deals so close to each other.

“One took longer than expected, and one was much faster than expected,” Stiskin told TechCrunch. He declined to disclose the updated valuation, stating only that it is twice the (also undisclosed) valuation associated with its 2024 $54 million Series B.

The timing may have worked in Finom’s favor. Since the company doesn’t publicize its unit economics — apart from its user base of 125,000 — the fact that General Catalyst took a look under the hood likely helped boost interest and speed up the funding. That vote of confidence — and its direct interest in recouping its money — may have been the signal that got investors to hurry up and write checks.

Beyond the signaling effects, getting the Customer Value Fund to finance Finom’s marketing efforts without giving up equity may seem like a good deal for its Series C backers — which include General Catalyst itself.

However, the Series C will also fund riskier efforts than customer acquisition through marketing. 

According to Petrov, one of its uses could be strategic, opportunistic acquisitions that would allow it to expand either its customer base or its product portfolio. That represents a shift in strategy, given that Finom has only acquired one company so far — in 2022, when it purchased Kapaga, a British cross-border payment service when Finom was considering expanding into the U.K.

Since then, Finom has shifted its focus to some of Europe’s largest markets, where it sees greater opportunity than in the U.K. The company believes these markets have fewer challenger banks competing for SMBs and that traditional banks are doing a poor job serving small businesses.

Like many neobanks, however, it only operates with an electronic money institution (EMI) license in most of its main markets: the Netherlands, France, Italy, and Spain (though not Germany, where it partnered with Solaris, which has a full banking license).

Despite these licensing limitations, it was able to add lending in the Netherlands, which it sees as a testing ground for its credit offering — something Petrov sees as a must-have for any fintech and for business customers. 

This lending initiative is also in line with Finom’s efforts to expand its product line both horizontally — with deposits and loans — and vertically, “starting from a banking account and ending in paying taxes, reports, and everything.” AI is involved as well, and not just on the product side. 

The company is also leveraging AI internally. With a team of 500, it expects to make some business- and tech-related hires, though not so much to scale its operations. “We’re adding some people, but mostly we’re adding new types of AI agents to work with internally,” Petrov said. “So we are hiring less than we need, and we see good output in terms of using AI and AI agents to automate part of [our] routine tasks.”

Finom’s leadership structure has also evolved. The split of duties between Finom’s four co-founders has gone through some changes over the years, with Petrov now the sole CEO — a role he once shared with Yakov Novikov, who is now an advisor alongside Oleg Laguta. 

The three of them previously created Russian digital bank Modulbank. But this time, Finom’s focus is on Europe and its entrepreneurs who are, in Stiskin’s words, “the backbone of the European Union economy.”