Novo nabs $35M from GGV Capital to expand small business banking platform

By Riley Kaminer

We have another soonicorn in our midst.

Upon a backdrop of economic uncertainty, Miami-based small business banking platform Novo on Tuesday announced that it has raised $35 million in a round led by GGV Capital at a pre-money valuation of $720 million. This valuation is up from $610 million in January, when Novo raised a $90 million Series B led by growth equity firm Stripes.

So far, Novo has raised upwards of $170 million in equity funding. They have also proved resilient in a consolidating market, surviving while competitors such as BBVA-backed Azlo closed their (digital) doors and others such as Brex pivoted toward enterprise customers.

Novo offers a suite of business banking tools focused on digitally-run micro and small businesses, all centered around its free checking account. The startup plans to use the funds to scale small business checking account integrations and partnerships.

In 2021, Novo launched new features including an apps marketplace, a tool to provide small businesses and freelancers with same day access to payments received through Stripe, and Express ACH for processing same-day ACH payments. The company reports that these products can help users shave multiple days off banking related admin tasks.

“Over the last year, we’ve added incredible new functionality to the Novo Platform and brought on tens of thousands of new small business customers,” Michael Rangel, Novo CEO and co-founder, said in a statement.

“GGV has been instrumental in scaling some of the world’s most successful technology companies across industries, from Airbnb to Square,” Rangel continued. “With their support, we look forward to reaching millions more small businesses in the coming years.”

Already, Novo has surpassed $12 billion in lifetime small business transactions across its over 180,000 small business customers – up from 140,000 at the end of last year. The company’s revenue has also grown, with the company projecting to bring in $20 million this year, compared to $8 million in 2021. Novo employs more than 250 people globally; that’s up from about 150 at the end of last year.

Hans Tung, managing partner at GGV Capital, shared his optimism about Novo’s future prospects – noting that the company’s focus on building products to solve their clients’ needs will propel it forward.

“What’s impressed us most about Novo is their ecosystem approach to small business checking — they’ve built a robust, intuitive platform that allows SMBs to connect all of their business and financial applications to their Novo account,” said Tung. “I’m confident that Novo will continue to scale its app partnerships effectively, and become one of the most widely-used small business checking accounts in the United States.”

Originally founded in New York in 2018, Novo landed in Miami during the pandemic. Co-founders Rangel and Tyler McIntyre are Miami natives who jumped on the opportunity to help build the Magic City into a fintech hub.

“The future for my Miami is very bright, so bring your sunglasses,” Rangel told Refresh Miami Tuesday.

“When Tyler and I moved Novo’s headquarters to Miami in 2021, we initially weren’t participating in the tech community because we were so busy working,” continued Rangel. “As soon as we got more involved with the broader ecosystem, we became very bullish on Miami as a Tech Hub.”

“Recently, I went to a few tech events and noticed that they were tangibly different from anything I’ve experienced in Miami before in terms of sheer quantity of attendees, and the quality of the speakers. Given my long-term perspective on Miami, having grown up in the area, I can comfortably say the city has continued changing for the better.”

Novo currently has 30 employees in South Florida – a number Rangel signaled he is keen to increase in the near future.

“From day one, Novo has been a crucial partner in our journey to become the Capital of Capital,” Miami Mayor Francis Suarez said in a statement.

“Michael and Tyler – Miami natives – and the entire team at Novo have built a company that captures the Miami Movement in its entirety: a Miami-based company that leverages technology to provide small businesses a digital financial platform, connecting with their customers in an efficient, elegant manner,” continued Suarez. “Their success story speaks for itself, and I am looking forward to witnessing their continued growth.”

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Riley Kaminer

I am a Miami-based technology researcher and writer with a passion for sharing stories about the South Florida tech ecosystem. I particularly enjoy learning about GovTech startups, cutting-edge applications of artificial intelligence, and innovators that leverage technology to transform society for the better. Always open for pitches via Twitter @rileywk or www.RileyKaminer.com.