nuula Secures $120M Funding for SMB Super App

Nuula Secures $120 Million to Develop Financial Super App for SMBs

A Canadian-based fintech startup, Nuula, has successfully raised $120 million in funding to facilitate the development of a comprehensive super app. This application is designed to deliver a wide array of financial services specifically tailored for small and medium-sized businesses (SMBs).

Funding Details

The funding round consists of $20 million in equity investment led by Edison Partners, complemented by a $100 million credit facility provided by funds overseen by the Credit Group of Ares Management Corporation.

App Launch and Expansion Plans

Nuula’s application has been undergoing limited beta testing since June of this year. A general release is planned in the near future. The company intends to progressively introduce additional services.

Many of these services will leverage an embedded finance strategy. For instance, business banking functionalities will be supplied by a third-party provider and seamlessly integrated within the Nuula app, anticipated for early 2022.

API Integration and Geographic Reach

The startup will also extensively utilize Application Programming Interfaces (APIs) to incorporate various white-label services. These include both Business-to-Business (B2B) and customer-facing payment solutions. Initial rollout will occur in the U.S., followed by expansion into Canada and the U.K., with further plans to extend services across Europe.

Current and Future Product Roadmap

Currently, Nuula offers features such as cash flow forecasting, monitoring of both personal and business credit scores, and tracking of customer sentiment. The development roadmap includes monitoring of key performance indicators (KPIs) encompassing financial data, payment information, and e-commerce metrics.

CEO Insights

“We are focused on creating tools that function synergistically within the app,” stated CEO Mark Ruddock. “Currently, businesses can forecast potential cash flow shortages and monitor their credit ratings. We also provide real-time customer feedback analysis. Our goal is to consolidate essential metrics, which SMBs previously needed to access from multiple applications, into a single platform.”

Evolution from BFS

Nuula originated as a side project within BFS, a company specializing in small business lending. During this time, the team began exploring ways to enhance data utilization to broaden their service offerings within the same market segment.

BFS itself experienced significant growth, securing $184 million in funding from Edison and Honeywell. Management eventually recognized the pivotal role of data analytics and the super app concept in driving future business expansion, leading to a pivot and rebranding earlier this year, followed by the app’s beta launch.

The Growing SMB Fintech Market

Nuula’s ambitions align with a broader trend in the fintech landscape. Small and medium enterprises have emerged as a substantial business opportunity in recent years.

Historically overlooked in favor of consumer or large enterprise solutions, SMBs have demonstrated a willingness to invest in innovative technologies to improve their operations, prompting a surge in startups and established tech companies catering to this sector.

The Rise of Super Apps in Fintech

Super apps are gaining prominence within the fintech industry, although much of the current focus has been on consumer-facing applications. Nuula aims to disrupt this trend by concentrating on the SMB market.

Addressing a Market Gap

“Despite the increasing number of services targeting the SMB sector, innovation still lags behind that of consumer and enterprise offerings,” Ruddock explained. “We identified an opportunity to introduce fresh perspectives to this space. We envision our app becoming an indispensable tool for SMBs, providing valuable tools, insights, and capital to support their growth.”

Data-Driven Approach and Competitive Landscape

Nuula’s emphasis on building data services that integrate all functionalities mirrors the strategies employed by many neobanks. The underlying principle is that core banking services are becoming increasingly commoditized.

Therefore, differentiation will stem from innovative algorithms and data-driven insights, empowering users to optimize their resources.

Key Competitors

Other companies developing fintech solutions for SMBs include Selina, ANNA, Amex’s Kabbage, Novo, Atom Bank, Xepelin, Liberis, as well as industry giants like Stripe, Square, and PayPal.

Nuula’s Credit Product: A Proactive Approach

The credit product currently offered by Nuula serves as a preview of its broader vision – to be a valuable resource for SMBs, extending beyond simply providing or managing funds.

It operates not as a traditional loan service, but rather as a system that continuously monitors a customer’s cash flow and proactively suggests a credit line, directly integrated with their existing bank account, when a need is identified.

Investor Perspectives

“Innovations in financial technology have broadened access to capital for small business finance,” stated Gary Golding, General Partner at Edison Partners. “By combining essential financial performance tools and insights into a unified interface, Nuula represents a new generation of financial services technology for small businesses, and we are enthusiastic about the firm’s potential.”

Jeffrey Kramer, Partner and Head of ABS in the Alternative Credit strategy of the Ares Credit Group, added, “We are pleased to collaborate with Nuula as they develop a unique financial services resource for small businesses and entrepreneurs. The ongoing evolution of financial technology continues to create opportunities for innovation and the emergence of new industry players. We anticipate that Nuula’s experienced team of technologists, data scientists, and financial service professionals will deliver a new generation of small business financial services solutions to the market.”