Nearside, a fintech startup formally known as Hatch, announced Monday it secured $58 million in a Series B funding round. This round comes just eight months after the San Francisco-based startup raised a $20 million Series A.
The recent Series B was led by Valar Ventures with participation from Kleiner Perkins, Foundation Capital and several angel investors.
Nearside is an online bank that offers free checking accounts for small and midsized businesses with no monthly fees, overdraft charges or ATM fees. It also offers a debit card program with universal one percent cash back and five percent cash back with merchants such as Amazon, Walmart, Shopify and Squarespace, among others. According to the company, the cashback rates are unmatched by other banks.
Although Nearside launched in 2019, it started offering free banking services earlier this year. It initially charged $10 for a checking account before switching to the free business model.
“Most small businesses are low margin, high cash flow, so they don’t have $4,000 just laying around,” Nearside CEO Thomson Nguyen told TechCrunch back in April.
The company has not publicly stated the number of customers it works with but did say that its user base grew by 800 percent since the Series A funding round.
Many of Nearside’s customers are first-time business owners who launched their businesses during the Covid-19 pandemic, and according to NPR, a record number of businesses have launched during this time.
With the new capital, Nearside is planning to expand its product offerings. Currently, it plans to launch a Term Loan program and another product titled Sprout, which would allow entrepreneurs to pitch the company and have their business launched using Nearside’s dashboard and platform.
“We believe that people work hard to earn their money and they should be rewarded when they invest in their businesses and not lose their money on hidden bank fees. Access to capital and premium cash back rewards should not be limited to those with prime credit scores.” Nguyen said in a prepared statement.
Nearside is not the only local fintech startup making headlines. San Francisco-based Fundbox recently secured a $100 million Series D round. Fundbox offers AI-powered tools to aggregate and analyze data from business transactions to help make more informed decisions.
