Oxygen Neobank Valuation: Funding Talks at Over $500M

Oxygen Banking Startup Pursues New Funding

Oxygen, a company focused on providing digital banking solutions to freelancers and small businesses, is reportedly exploring a new investment round.

Discussions are underway to secure funding at a valuation exceeding $500 million, according to two individuals with knowledge of the negotiations.

Series B Funding Discussions

The firm, based in San Francisco, is in advanced discussions to raise approximately $70 million.

Tribe Ventures, a London-based investment firm, is being considered to lead Oxygen’s Series B funding round, sources indicated, while requesting to remain unnamed due to the confidential nature of the talks.

Addressing an Underserved Market

Historically, traditional banks in the United States, and internationally, have often been reluctant to provide services to individuals lacking conventional employment and a stable income.

This challenge was personally experienced by Hussein Ahmed, a former Amazon employee, when he transitioned to freelance consulting.

The Genesis of Oxygen

“It was during this time that I identified the specific market segment we now cater to,” Ahmed explained in a recent podcast appearance.

While working at a WeWork location, Ahmed observed that a wide range of professionals – including photographers, real estate agents, and accountants – were encountering the same difficulties accessing banking services.

This realization prompted Ahmed to establish Oxygen.

Oxygen’s Service Offering

The startup provides both consumers and small businesses with accounts that have no monthly fees.

These accounts are FDIC insured, require no minimum balance, and include a Visa debit card.

Growth and Backing

Oxygen has already attracted a substantial customer base, exceeding 600,000 users.

The company’s backers include prominent investors such as Y Combinator and Runa Capital.

Recent Performance and Future Plans

Oxygen declined to provide specific comments regarding the funding discussions.

However, through a spokesperson, Hussein Ahmed stated that the company experienced “significant growth in 2021,” with revenue increasing tenfold this year.

“We are continually evaluating options for financing our future initiatives and will provide an update when appropriate,” Ahmed added.