Using tech to propel small businesses
This is the September 7, 2022 edition of the Opportunity Miami newsletter written by Matt Haggman, which we send every Tuesday. Click here to subscribe to get our weekly updates in your inbox.
Tech is about creating big companies, solving problems at scale, and building the next billion-dollar business. But what about using technology to propel small companies like micro businesses and freelancers?
A Miami-based tech startup, Novo, is doing just that and, along the way, is becoming a very big company itself.
“Novo is focused on creating better business banking products for the economic engine of this country, aka, small businesses,” said Michael Rangel, who co-founded the company in 2016 with a fellow University of Miami alum, Tyler McIntyre. Novo, which didn’t officially launch until 2018, was recently named to Forbes’ Fintech 50 and has raced to a valuation of $700 million.
“We are an overnight success, just six and a half years in the making,” joked Rangel.
Novo may well be Miami’s next unicorn — that is, a billion-dollar business — by serving businesses that range from one employee to about ten. It’s a vast and highly fragmented market, including everything from lawn mowing businesses and freelance photographers to hair salons, chiropractors, and e-sports teams, among countless others.
It’s also a market that’s largely been overlooked by big banks.
Today Novo has more than 150,000 small business customers across all 50 states. It has 250 employees, outposts in New York and India, and its headquarters is in Miami. It’s based in a WeWork in Brickell.
Rangel joined us on our latest Opportunity Miami podcast to talk about why he’s building a tech company focused on the financial needs of the smallest businesses, the early years of building Novo, and why — after leaving Miami for New York City — he’s returned and doubling down on his hometown.
Novo’s focus on propelling small businesses is a big deal for cities like Miami because there are so many of them. A recent survey ranked Greater Miami number one among all large metropolitan areas for small businesses per capita.
Meanwhile, illustrating the sector’s size, the same report said small businesses with fewer than 50 employees account for 40 percent of private sector employment across the U.S.
Yet, the insight Rangel hit upon is that small businesses often fail due to poor cash management. Furthermore, small businesses often use an array of disconnected services, from a simple checking account to accepting credit card payments, making payroll, and paying vendors. Novo’s insight was to connect the underlying tools and bring them under one roof.
To be sure, if the small business story is one of grit and hard work, the Novo story is one as well. While it’s now been showered with venture capital funding to fuel its growth, Novo’s first few years building the platform were boot-strapped through personal savings, frugal living, and sharing a small one-bedroom apartment to live and work.
“I have very fond memories of that time in my life because it gave us a really interesting and humble perspective of the entire thing,” Rangel said. “We built this business in a very different way than the typical Silicon Valley, high-flier, VC-backed startup story.”
He added: “It was just all about the grind. Me and Tyler in a room all the time.”
In many ways, Novo provides an illustration of how technology can be used to propel those often overlooked. It’s also an illustration of Miami’s enormous strides in becoming a tech hub.
“There will always be skeptics,” said Rangel. “Every excuse that has been thrown my way has been disproven. I am very intentional about doubling down on Miami.”
On a separate note, global tech firm Globant, which has an office in Miami, has launched its third edition of Women that Build Awards. The Beacon Council and Opportunity Miami are helping promote nominations and voting. Please check it out, nominate amazing women in Miami, and vote.
As always, we want to hear from you. We would love to hear your ideas on people, organizations, and trends that are pivotal to Miami’s economic future. You can email us at firstname.lastname@example.org or engage with us on social media. Please invite friends to subscribe to the newsletter here.
Hope to see you.
P.S. One final note: our first Opportunity Miami Live event on Thursday is at capacity. We’re thrilled to see such a great response as Opportunity Miami’s Academic Leaders Council presents a talk on talent development by Lumina Foundation CEO Jamie Merisotis. Looking forward to seeing many of you there.