Small and medium business owners check their bank balances every day to make financial decisions. But it’s entrepreneur Yoseph West’s claim that bank accounts are often missing information and features that owners could actually use.
“SMEs make up 44% of US GDP, support the economy and have a profound impact on all of us,” West told TechCrunch. “Yet most SMEs have enough cash on hand to last 27 days. They need greater clarity and control of cash flow in their banking operations.”
West, who studied equity and debt finance in college, co-founded Vuru, a stock market research app, in 2012. After fintech Wave Accounting acquired Vuru later that year, West stayed on and eventually graduated to director of product engagement.
While at Wave, West had the idea for his next company: Relay, a business banking and money management service for small and medium businesses. West teamed up with Paul Klicnik, a former IBM engineer who previously developed the core technical infrastructure in the Flipp coupon app, 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 real cash flow clarity to SMEs.”
Relay’s platform allows SMBs to organize their income, expenses and inventory across up to 20 checking accounts. (Relay is not a bank itself. The company relies on partner Thread Bank for its banking services, which West says are FDIC-insured.) Through Relay, a company can automatically deposit cash into accounts savings account with 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 check payments just as they would with traditional banks. And they can capture and store receipts, allowing employees to access them through role-based accounts.
The company makes money through interest on customer deposits, card interchange fees and a $30-a-month premium service (Relay Pro) that adds features like same-day payments and competes with neobanks like Bluevine and Mercury. But West argues that Relay is one of the few of its kind that doesn’t focus on tech startups or individual business owner customers.
“Relay is built for the 33 million-plus small and medium businesses in the US and their internal or external finance functions,” he said. “We primarily serve America’s heartland small businesses that have 2+ employees — full-time, part-time or contract — and generate $20,000 to $200,000 in monthly revenue.
This has proven to be a winning strategy.
West predicts that Relay will reach $100 million in annual revenue by the second half of 2025. Revenue grew 3x in 2022 — and close to 6x in 2023 — thanks to a strong customer base that currently stands at ~100,000 businesses.
This is even more impressive considering the state of the fintech industry.
Last year, venture investment in financial services and fintech fell to $43 billion, its lowest level in six years and down more than 50% year-on-year from the $89.5 billion invested in 2022. according on CrunchBase. The tight funding environment has contributed to the collapse of fintechs such as Synapse, the banking-as-a-service startup whose bankruptcy has affected the finances of millions of customers.
To help lay the groundwork for expansion into new spaces, including expense management, credit and financial APIs, Relay this week closed a $32.2 million Series B round led by Bain Capital Ventures with participation from BTV , Garage, Industry Ventures and Tapestry. The new cash brings the startup’s total raised to $51.6 million.
“We chose to increase because of our growth rate,” West said. “To get truly predictive cash flow analytics, SMBs need a unified view of cash inflows and outflows in their back office. Relay is building toward that vision… In the future, the platform will make intelligent recommendations to small businesses based on what’s happening across their back office.”
Toronto-based Relay plans to grow its workforce from 140 to 200 by the end of the year.
