FINOM, which offers a mobile-first financial management platform to SMEs and freelancers, has acquired cross-border PayTech Kapaga for an ‘eight figure sum’.
Through this acquisition, FINOM hopes to bolster its position in financial services, as well as boost its expansion plans in the UK and across Europe.
FINOM stated that just 3% of the 24 million European SMEs use digital services to manage their finances. The majority of owner-managed businesses use traditional banks, despite the growth of the FinTech sector and personalised offerings.
It was this gap that led to the creation of FINOM. It has established a mobile-first platform that provides SMEs and freelancers with a host of back-office financial management products. Features include e-invoicing, transactions within the Single Euro Payments Area (SEPA), and digital wallets.
Since its launch in 2019, the app has seen sizable growth in France, Italy and Germany, and is now live in 27 countries. It plans to expand into more European markets soon.
With its eyes on expansion, it acquired Kapaga to support this goal.
Kapaga was founded in 2020 by Bloomberg alumna Katya Dorofejeva and has seen revenue growth surpass £10m a year. It serves as a cross-border payment service that facilitates international trade for SMEs.
Currently, Kapaga supports over 200 UK SMEs and corporate entities in managing their finances and operating internationally across currencies. Its cloud architecture provides transparency and efficiency and supports money transfers to over 190 countries.
Kapaga founder and CEO Katya Dorofejeva said, “Joining forces with FINOM enables us to explore a unique and growing product. Entrepreneurs and freelancers are facing a plethora of challenges in setting up tactile business accounts that serve their needs. There is currently no continental fintech player that equally serves the UK and Europe in specifically targeting SMEs – until now!
“This merger solidifies two companies’ pursuits of providing tailored payment services for the entire continent. Kos and the team really understand the market and the specific needs of small and medium sized businesses. I am sure that we will benefit from each other’s knowledge and expertise to serve this crucial segment and grow the fintech arena.”
Earlier in the year, FINOM signed a deal with financial crime prevention startup Resistant AI. Through the deal, FINOM has enhanced its ability to monitor transactions an uncover any unusual or anomalous behaviour.
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