Small and medium companies and sole-traders account for the overwhelming majority of companies globally, 99.9% of all enterprises within the UK alone. And whereas the existence hundreds of thousands of separate corporations, with their particular person calls for, speaks of a fragmented market, collectively they nonetheless characterize lots of alternative. Today, a UK fintech startup seeking to capitalise on that’s asserting a spherical of development funding to enter Europe after onboarding 20,000 prospects in its dwelling nation.
ANNA, a mobile-first banking, tax accounting and monetary service assistant geared toward small and medium companies and freelancers, has closed a $21 million spherical of funding from a single investor, the ABHH Group, the typically controversial proprietor of Alfa Bank in Russia, the Amsterdam Trade Bank within the Netherlands, and different companies.
The funding is a strategic one: ANNA might be utilizing the funding to broaden for the primary time exterior of the UK into Europe, and CEO Edouard Panteleev stated that effort might be constructed on Amsterdam Trade Bank’s rails. He confirmed that the funding values ANNA at $110 million, and the founders preserve management of 40% of the corporate within the deal.
The fundraising began earlier than COVID-19 actually picked up pace, however its chilling impact on the financial system has additionally had a direct impression on the very companies that ANNA targets as prospects: some have seen drastic reductions in industrial exercise, and a few have shuttered their companies altogether.
Despite this, the state of affairs hasn’t modified measurably for ANNA, Panteleev stated.
“Covid-19 hasn’t impacted us to this point. We are designed as a digital enterprise, and so working from dwelling was a very regular shift for us to make,” he stated, however added that on the subject of the shoppers, “Yes, we’ve seen that our prospects’ incoming funds are fairly affected, with 15-30% lower within the quantity of buyer funds.” The agency perception that ANNA and buyers have, nevertheless, is that enterprise will bounce again, and ANNA needs to ensure it’s in a powerful place when it does.
ANNA is an acronym for “Absolutely No Nonsense Admin” and that explains the gist of what it goals to do: it supplies an all-in-one service for smaller enterprises that lets them run a enterprise account to make and obtain funds, together with software program for invoicing, accounting and managing taxes that’s run via a chat interface to help you and automate a few of the capabilities (like bill monitoring). ANNA additionally affords extra companies, comparable to connecting you to a stay accountant throughout tax season.
ANNA is a part of a wave of fintech startups which have cropped up within the final a number of years particularly focusing on SMEs .
It was once the case that SMEs and freelancers had been drastically underserved on the planet of monetary companies: their enterprise, even collectively, just isn’t as profitable as accounts from bigger enterprises, and subsequently there was little innovation or consideration paid to how one can enhance their expertise or choices, and so no matter conventional banks needed to provide was what they obtained.
All that modified with the rise of “fintech” as a salient class: ever-smarter smartphones and app utilization are actually ubiquitous, broadband is cheap and likewise widespread, cloud and different expertise has turbo charged what folks can do on their gadgets, and persons are simply extra digitally savvy. A wave of startups have taken benefit of all that to develop fintech companies catering to SMEs, which additionally has meant competitors from the likes of Monzo, Revolut, Tide, and now even choices from excessive avenue banks like NatWest.
Panteleev believes ANNA’s product stands separate from these. “We provide extra of a monetary assistant to customers, quite than simply shifting their cash, and it’s additionally a unique enterprise case, as a result of we take a look at what a consumer wants extra holistically,” he stated. Pricing can also be a bit totally different: companies with month-to-month earnings of lower than $500 can use ANNA totally free. It then goes up on a sliding scale to a most of £19.90 per 30 days, for these with month-to-month earnings between £20,000 and £500,000.
Panteleev — who co-founded the corporate with Andrey Pachay, Boris Dyakonov, Daljit Singh, Nikita Filippov, and Slava Akulov — is a repeat entrepreneur, having based two different banking startups in Russia with Dyakonov which can be nonetheless going, Knopka (Russian for button), and Totchka (Russian for dot). These are older and extra established: Totchka for instance has some 500,000 customers, however Panteleev has stated that there aren’t any plans to attempt to carry ANNA into the Russian market, nor take these different corporations worldwide.
For ABHH, the attraction of investing on this specific startup was in all probability two-fold. The companies have Russian DNA in widespread, making for doubtlessly a greater cultural match, but in addition it’s yet one more instance of a legacy, giant financial institution tapping right into a smaller and extra fleet-of-foot startup to deal with a market sector that the larger firm is likely to be extra challenged to do alone.
“I’m trying ahead to embarking on this thrilling journey collectively,” stated Alan Vaksman, member of the supervisory board at Amsterdam Trade Bank and future chairman of ANNA, in an announcement. “At this second most SMEs discover themselves in a difficult state of affairs, nevertheless, as soon as the pandemic involves an finish, there might be a really clear realisation that neither corporates nor household companies can afford to run most operational processes manually. Tech companies and platforms, like ANNA, are in for some dynamic instances forward.”