Rho Technologies, which is building out a digital banking platform for businesses, has raised $15 million in a Series A round led by M13 Ventures.
Torch Capital and Inspired Capital also participated in the financing, which brings the New York City-based company’s total raised to over $20 million since its 2019 inception. The bulk of that funding has gone towards building out the team and scaling Rho’s technology, according to Rho co-founder Alex Wheldon.
Rho has developed a finance platform from the ground-up that provides commercial finance solutions and tools for its clients. Its “full-service” digital banking solutions integrate with the tools and services that business owners use to run their businesses.
“The ethos of Rho is simply trying to help organizations work better together with money,” Wheldon told FinLedger. “We try to codify that in everything that we do from our services that we provide for clients down to our software and our products.”
Wheldon would not disclose the valuation the funding was raised at or the company’s revenue. But, as of December 2020 the platform is handling over $2 billion per year in annualized transaction volume for its clients. Rho serves a variety of businesses including financial service companies, SaaS companies, e-commerce and other “innovation-based businesses.”
The startup is using its new capital in part to launch Rho AP, which expands on its core banking platform and allows companies to run full accounts payable life cycles.
Rho clients have access to full accounts payable automation, which means that invoices are uploaded, approved, coded and paid all within its platform. The company claims that vendors get paid on time and accounting is more precise as well. The startup was founded by both Wheldon and former Point72 and Deutsche Bank alum Everett Cook.
Currently, Rho has about 30 to 35 employees, but Wheldon said he wants to double the team in 2021.
“We definitely plan to expand and use the proceeds to not only invest in new technology, but our team as well,” he said. “Our model relies on people. We are not just software-first, we take a banking service approach to all of our client services.”
Going forward, Wheldon said he wants the company to become the de facto choice for commercial banking.
“We want to continue to focus on those sets of problems that exist across the finance department within every organization,” he said. “There’s a number of them that we’d like to focus on as we build out, especially as it relates to insights, reporting and more data management.”
Latif Peracha, general partner at M13 and board member at Rho, said in a written statement that several of his firm’s portfolio companies have chosen Rho for their banking needs.
“We believe there is an opportunity to build a powerful brand in business banking that treats the enterprise – and specifically the CFO – as a consumer, and Rho has done that with a fully integrated product that makes managing a business much easier,” Peracha said in the statement.
While digital banks are all the rage in fintech, many incumbent banks are taking notice and bolstering technological capabilities while shuttering physical branches.