America’s Challenger Bank for SMBs: Our Investment in NorthOne
By: Tyler Flint and Alex Bard
One-third of small and medium businesses started in the United States will fail within two years of inception. The most frequently cited root cause of failure is cash flow mismanagement. Because they have historically lacked modern, purpose-built software to gain visibility and control of their finances, the 30 million U.S. small businesses frequently rely on manual and error-prone calculations to measure their financial health. In short, financial administration for small business owners is a mess — and banks do the bare minimum to help.
While innovation and investment in consumer finance products has raised the bar for business banking, conditioning users to expect insights and intuitive experiences that work seamlessly with third-party applications, it’s been slower to come to SMB. The status quo for SMB banking remains branch visits, tedious phone support, and clunky digital experiences repurposed from enterprise banking.
That’s why we’re so excited about the promise of NorthOne, which has rapidly become the leading digital challenger bank for SMBs. Growing up in a family of small business owners, NorthOne Co-Founder and CEO Eytan Bensoussan saw first-hand the frustration of managing SMB finances. Eytan later spent four years at McKinsey & Company working with the world’s largest banks, where he was struck by how poorly equipped banks were to innovate and meet the needs of SMB customers.
Eytan has taken these experiences and partnered with Co-Founder Justin Adler to build a better banking platform for small business, startups, and freelancers from the ground up. At Redpoint, we are always looking for founders that have up close, first-hand experience, an understanding of the opportunity, and empathy for the customer. Eytan and Justin embody these values — and demonstrate what a difference it makes — in their work with NorthOne.
The NorthOne team brings a relentless customer focus to SMB banking. Prior to launch last year, the team conducted over 300 customer interviews to understand the nuanced needs of small business owners. While traditional small business bank accounts shift the heavy lifting of assessing company performance to the SMB — requiring manual aggregation of disparate inputs needed for accurate cash flow forecasting (AR / AP, invoices, ERP data, etc.) — NorthOne brings it all together. Now, instead of owners tackling these tedious and time intensive back office burdens at the kitchen table after work and on weekends, NorthOne lets them actually focus on the insights, and on running their business.
We’re thrilled to continue to deepen our partnership with the NorthOne team by investing in its Series A. Since leading NorthOne’s Seed round less than a year ago, we have watched as Eytan, Justin, and the entire NorthOne team have taken a vision to better serve the $100 billion SMB banking category and built an app loved and used by thousands of business owners in the United States.
