Toronto-based NorthOne has raised $2 million in seed funding to build out its mobile banking platform targeting small businesses.
The round was led by investors including angel investor Peter Graham, BetterCompany founder Tom Williams, and returning investor Ferst Capital Partners. The company originally launched as Ferst Digital after Ferst Capital, which invested in the company and housed CEO Eytan Bensoussan as entrepreneur-in-residence. It rebranded as NorthOne in fall 2017.
“We actually benchmark ourselves on more than just FinTech.”
NorthOne is building a mobile banking platform that connects to the financial tools companies use and provides insight into the financial health of the business while automating management tasks. Four thousand businesses have signed up for NorthOne accounts ahead of the platform’s launch.
NorthOne will use the funding to expand its team from five to 15, and complete development of the NorthOne platform ahead of a late 2018 launch. Specific details on pricing will be announced closer to launch, but it will be based on a flat monthly fee which includes unlimited transactions and third-party app integrations.
“It’s stage-agnostic. There’s obviously a natural fit with the early-stage, but we’re looking to serve small businesses with 20 to 30 people or less, whether they’re new or pretty old. Part of what we want to do is that, some businesses want to grow big and we’ll help them do that,” said Bensoussan when asked about the company’s target user. “But other ones that just want a great way to feed their families and not have the nightmare of getting books and financial management in order, we want to give them back those hours.”
While it works to officially launch its platform in the fall, NorthOne has been launching several microsites related to growing a business to draw interest to the company. In 2017, NorthOne launched its Incorporate in Canada website allowing businesses to get applications for incorporation processed within two business days, a banking fee comparison tool to help businesses get an idea of the most cost-effective bank account, and a financial health checklist.
“Something we’re working on actively right now that will be part of the core product we’re going to be releasing, is the financial management a business does outside of core banking,” said Justin Adler, COO of NorthOne. “I think where our product provides value is the other stuff — the fact that a NorthOne account has an API, it can connect to accounting software and all the financial management products they use. [It’s] making their experience working with other products better too.”
FinTech is one of Canada’s fastest-growing verticals, with $566 million CAD invested in the sector in 2017. But Bensoussan maintains that the company can differentiate itself from other FinTechs as it’s working in a niche space.
“In our vertical right now we’re part of the first wave of these startups around the world. There aren’t really any others in Canada working in small business banking space,” said Adler. “We actually benchmark ourselves on more than just FinTech. When we think about our design or go-to-market, we take playbooks out of Slack, Instagram, all the things people choose to use is how we designed our product and how we’ve gone about messaging that out loud.”