Fintech
Relay raises $32.2 million to help small businesses manage their cash flow
Small and medium-sized business owners check their bank balances daily to make financial decisions. But it’s entrepreneur Yoseph West’s claim that bank accounts typically lack information and features that owners could actually use.
“SMEs represent 44% of US GDP, support the economy, and have a profound impact on all of us,” West said in an interview with TechCrunch. “Yet most SMEs only have enough cash to last 27 days. They need greater clarity and control over cash flows in their banking sector.”
West, who studied equity and debt finance in college, co-founded Vuru, a stock market research app, in 2012. After fintech firm Wave Accounting acquired Vuru that same year, West stayed on, eventually graduating to the role of director of product engagement. .
While at Wave, West had the idea for his next company: Relay, a business banking and money management service for SMEs. West teamed up with Paul Klicnik, a former IBM engineer who previously developed the core technical infrastructure of coupon app Flipp, to launch Relay in October 2018.
“Relay is an online business banking and money management platform designed to help small businesses take control of their cash flow,” West explained. “The platform is focused on providing true cash flow clarity to SMEs.”
Relay’s platform allows SMEs to organize income, expenses and reserves across up to 20 checking accounts. (Relay is not a bank itself; the company relies on its partner Thread Bank for the banking services it provides, which West says are FDIC insured.) Through Relay, a company can automatically set aside cash in savings accounts with the 1% – 3% APY and issue up to 50 physical or virtual Visa debit cards to employees.
Relay users can send and receive ACH transfers, wires, and checks as they would with traditional banks. Additionally, they can capture and store receipts, allowing employees to access them via role-based accounts.
The company makes money through interest on customer deposits, card interchange fees and a $30-per-month premium service (Relay Pro) that adds features like same-day payments and competes with neobanks like Bluevine and Mercury. But West says Relay is one of the few of its kind that doesn’t focus on tech startups or individual entrepreneur clients.
“Relay was created for the more than 33 million SMBs in the United States and their in-house or outsourced finance functions,” he said. “We primarily serve small businesses in the ‘heartland of America’ that have more than two employees – full-time, part-time or contract – and earn $20,00 to $200,000 in monthly revenue.”
Image credits: Relay
This proved to be a winning strategy.
West expects Relay to reach $100 million in annualized revenue by the second half of 2025. Revenue grew 3x in 2022 – and nearly 6x in 2023 – thanks to a strong customer base that now stands at approximately 100,000 companies.
This is even more impressive when you consider the state of the fintech industry.
Last year, venture capital investment in financial services and fintech fell to $43 billion, the lowest level in six years and down more than 50% year-over-year from $89.5 billion invested in 2022. second at CrunchBase. The austere funding environment has contributed to the collapse of fintechs such as Synapsesthe banking-as-a-service startup whose failure impacted the finances of millions of customers.
To help lay the foundation for expansion into new spaces, including spend management, credit and financial APIs, Relay this week closed a $32.2 million Series B round led by Bain Capital Ventures with the participation of BTV, Garage, Industry Ventures and Tapestry. The new liquidity brings the startup’s total raised to $51.6 million.
“We chose to scale up because of our growth rate,” West said. “To truly achieve predictive cash flow analytics, SMBs need a unified view of cash inflows and outflows in the back office. Relay is building towards this vision… In the future, the platform will provide intelligent recommendations to small businesses based on what is happening in their entire back office.”
Relay, which is based in Toronto, plans to increase its workforce from 140 to 200 people by the end of the year.