Founded in Canada, Fintech NorthOne Closes CA$92.1 Million Series B to Serve Small Businesses in the U.S.

Betakit | Charlize Alcaraz | Oct 13, 2022

Canadian-founded FinTech startup and challenger bank NorthOne has announced the closing of its $92.1 million CAD ($67 million USD) Series B round.

• Investment partners: The financing, which closed in “late summer,” included participation from Battery Ventures, Don Griffith, retired National Football League player Drew Brees, Ferst Capital Partners, FinTLV, Next Play Capital, Operator Stack, Redpoint Ventures, Tencent, and BetterCompany founder Tom Williams.
• To-date funding: NorthOne noted that the Series B round brings its total funding to $90.3 million USD raised since it launched. In past funding, the startup closed a $29.3 million CAD Series A round in 2020, and $2 million in seed capital in 2018.

See:  NorthOne announces Series A round of $21M USD

• U.S. SME market focus: NorthOne was founded in Toronto in 2016 by Eytan Bensoussan and Justin Adler. Most of its employees continue to be located in Toronto. A spokesperson for NorthOne told BetaKit that the Canadian startup moved its headquarters to New York as it only serves American small businesses. However, NorthOne still operates in Toronto and has an office in the city.
• Use of proceeds: According to NorthOne, this latest investment will support the company as it looks to build new working capital and credit products, as well as faster and more convenient payment solutions.

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TechCrunch | Mary Ann Azevedo | Oct 13, 2022

NorthOne is doubling down on SMBs as some fintech companies pull back

• Founders: Founded by Eytan Bensoussan and Justin Adler in 2016, the startup was born to serve small business owners such as barbers, mechanics and local restaurant owners.
• Growth:  In 2021, NorthOne replatformed the company with a new banking partner, The Bancorp Bank, N.A, an investment that it says has paid off. Over the last 12 months, Bensoussan said that NorthOne’s revenue grew “4x-5x” while customer growth was “in line with revenue growth.”
  • NorthOne has worked to offer more than banking services to its customers. It added products that would also help them simplify their financial operations

Eytan Bensussan:

By connecting the data layer between accounting, receivables, payables, lending, payroll — all the financial operations — and the bank account ledger.  As our customers grow, their problems evolve beyond the bank account.

See:  Fintech Lenders Polarized: Some Plan for a Difficult Year as Others See Opportunity

Adler:

A lot of folks are moving really aggressively toward that top side of the market — like a Fortune 500 company or a VC-backed startup, but the fact of the matter is that both of those markets are really niche.  We’ve actually really doubled down on our core customer base, which are businesses that you pass by on your way to work — like that cafe, or hair salon or dry cleaner — that are just really underserved by traditional banks and increasingly also by fintechs and challenger banks.

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