Finom, a Netherlands-based challenger bank which provides services for SMEs, has raised €50 million in a Series B funding round.

According to Northzone, the venture capital firm which provided the investment alongside General Catalyst, Finon will use the funding to reinforce its position in its core market in Germany and expansion in other European countries including Spain and France.

Finom, which first launched in 2020, has a customer base of around 85,000 SMEs and entrepreneurs who use its platform for a range of services including invoicing, expense management and foreign exchange services.

Northzone said that despite improvements in consumer banking over the past decade, SME banking is underserved. There are around 24 million SMEs across Europe which contribute over €4 trillion to the economy.

“Finom has a truly best-in-class core banking product, which forms the backbone of their customers’ financial stack,” said Sanjot Malhi, partner at Northzone. “However, the true platform potential of Finom is seen through its payments and microservices software offering for SMEs, with clear demonstrated success across several major Western European economies.”

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