Melbourne-based fintech startup Finch has closed an oversubscribed seed round, raising $2.25m in funding for its social payments app for millennials.
Launched in July, the Finch app allows users to pay and request money instantly (without a BSB), split bills, run tabs in groups to track shared expenses.
According to Shahirah Gardner, who co-founded the startup with her husband Toby Gardner in 2016, the seed funding will be used to complete product market fit, scale product development, grow its Melbourne-based team and accelerate customer acquisition.
In conversation with Dynamic Business, Gardner said the app began to generate interest from investors after Finch graduated from Envestnet | Yodlee – the No. 1 US-based Fintech program – earlier this year.
“Our strong performance throughout the program proved to a lot of people that Finch has the team and strategy to rival anything coming out of Silicon Valley at the moment,” she said. “In fact, when we went through the program, we were the only startup not funded…and we still won best product demo!
“As a result of this success, we’ve been courted by investors from both Silicon Valley and Australia, for months. We felt it was important, however, to hold back until we were ready to talk strategy and had a proven product in the market.”
Gardner said this approach paid off, allowing the founding team to carefully select strategic investors and fintech VCs that would help Finch grow.
“Only a handful of investors were privy to our seed round – three from the US and the rest from Australia,” she said. “While we’re not disclosing our investors at this stage, I can say they have proven track-record of working with fintech companies and helping them to scale rapidly.
“Further, although we were only looking to raise $1.5 million, we ended up receiving $3m in term sheets in just two weeks, before settling for $2.25m. From initial conversation to closing the round, it took only 6 weeks.”
Gardner said Finch has been enjoying “incredible growth” across Australia during its first few months on the market, with thousands of early adopters using the company’s app.
“We get people emailing us to give us tips and feedback on the things they love and what they want improved. We even have customers who can actually point to a specific button or a feature in Finch and tell their friends ‘Hey, see this on Finch – I did that!’ Our product is genuinely built for millennials, by millennials.
“While the user experience is evolving, we’ve spent a lot of money ensuring our platform is not only completely secure but compliant. In this respect, we worked very closely with the regulator ASIC and AUSTRAC ahead of launch to ensure Finch could reliably facilitate payments without any issues.”
Although Gardner revealed that she and her co-founder would seek to raise $10 to $15 million in Series A funding, next year, and that conversations were already underway with investors, she was tight-lipped when it came to further details.
“You’ll just have to keep an eye on us,” she said. “What I will say, however, is that Finch is looking to reimagine consumer finance for millennials in Australia and that bold ambitions require bold capital. Watch this space.”
Related: Banks are ‘missing a beat’ with millennials, says co-founder of fintech startup Finch