We’re excited to lead the $15 million Series A in Rho, which is providing a better banking solution for high-growth, scaling companies.
It’s no secret that the lines between enterprise and consumer have blurred. By leveraging strong referral networks and word of mouth to drive organic growth, great brands can be built across both that lead with design and product to fill a clear need for a core customer. Square, Slack, and Superhuman are all companies that come to mind.
In a short amount of time (est. 2018), Rho is building a trusted brand in business banking that leverages these tenets with a focus on the growing enterprise and specifically its CFO as the core customer. Rho uses software to make their decision-making easier, and in a remote, decentralized and increasingly turbulent world, this is crucial. We know this is not a new market, but it’s a big one: $178 billion across enterprise, SMBs, and solopreneurs.
There are legacy players and upstarts tackling it, but significant issues persist: According to Deloitte, 50% of the finance team’s time is spent on manual data extraction, while only 23% of accounts payable teams process vendor invoices automatically and only 19% of finance teams have automated controls for approvals.
Rho is solving these issues by combining core front-end banking and credit products with proprietary back-end products including accounts payable, expense management, and remittance. Multibillion-dollar companies have been built at each layer of this product stack (i.e. Transferwise, Expensify, Bill.com) but by integrating these services all on one platform, Rho is providing its customers with a seamless, trusted experience. Rho’s offerings help simplify setup and launch while making the relationship with customers (which, on average, last well over a decade) incredibly sticky.
We were introduced to Rho by one of our portfolio companies that was using it for their banking needs. We then discovered during diligence that another M13 portfolio company was also independently using Rho. This gave us the most natural proof of product-market fit, and as an operator-driven firm with partners who had experienced this problem acutely in past lives, we strongly believe this is a real need for all growth companies.
The other sign of the product-market fit is the numbers: the business has grown 15x since January 2020 and now manages $1.9 billion of annualized transaction volume, and we expect sustained growth through 2021. All of this has been done with no marketing to date, simply on the back of a very small sales team and strong word of mouth.
We’re so excited to partner with Everett Cook and Alex Wheldon, who are incredibly complementary co-founders: Everett brings a keen understanding of financial services markets from his time working as a macro hedge fund analyst at Point72, while Alex is a serial entrepreneur with success in ad tech, gaming, and fashion—including Kanary, Smarkets, and Lyst—due to his ability to build great, beautifully designed products.
Welcome Everett, Alex, and the whole Rho team to the M13 family—we look forward to working with you for years to come.
To learn more about M13’s investments, sign up for our newsletter here. To learn more about Rho, check out their website and Twitter.
We’re excited to lead the $15 million Series A in Rho, which is providing a better banking solution for high-growth, scaling companies.
It’s no secret that the lines between enterprise and consumer have blurred. By leveraging strong referral networks and word of mouth to drive organic growth, great brands can be built across both that lead with design and product to fill a clear need for a core customer. Square, Slack, and Superhuman are all companies that come to mind.
In a short amount of time (est. 2018), Rho is building a trusted brand in business banking that leverages these tenets with a focus on the growing enterprise and specifically its CFO as the core customer. Rho uses software to make their decision-making easier, and in a remote, decentralized and increasingly turbulent world, this is crucial. We know this is not a new market, but it’s a big one: $178 billion across enterprise, SMBs, and solopreneurs.
There are legacy players and upstarts tackling it, but significant issues persist: According to Deloitte, 50% of the finance team’s time is spent on manual data extraction, while only 23% of accounts payable teams process vendor invoices automatically and only 19% of finance teams have automated controls for approvals.
Rho is solving these issues by combining core front-end banking and credit products with proprietary back-end products including accounts payable, expense management, and remittance. Multibillion-dollar companies have been built at each layer of this product stack (i.e. Transferwise, Expensify, Bill.com) but by integrating these services all on one platform, Rho is providing its customers with a seamless, trusted experience. Rho’s offerings help simplify setup and launch while making the relationship with customers (which, on average, last well over a decade) incredibly sticky.
We were introduced to Rho by one of our portfolio companies that was using it for their banking needs. We then discovered during diligence that another M13 portfolio company was also independently using Rho. This gave us the most natural proof of product-market fit, and as an operator-driven firm with partners who had experienced this problem acutely in past lives, we strongly believe this is a real need for all growth companies.
The other sign of the product-market fit is the numbers: the business has grown 15x since January 2020 and now manages $1.9 billion of annualized transaction volume, and we expect sustained growth through 2021. All of this has been done with no marketing to date, simply on the back of a very small sales team and strong word of mouth.
We’re so excited to partner with Everett Cook and Alex Wheldon, who are incredibly complementary co-founders: Everett brings a keen understanding of financial services markets from his time working as a macro hedge fund analyst at Point72, while Alex is a serial entrepreneur with success in ad tech, gaming, and fashion—including Kanary, Smarkets, and Lyst—due to his ability to build great, beautifully designed products.
Welcome Everett, Alex, and the whole Rho team to the M13 family—we look forward to working with you for years to come.
To learn more about M13’s investments, sign up for our newsletter here. To learn more about Rho, check out their website and Twitter.
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The views expressed here are those of the individual M13 personnel quoted and are not the views of M13 Holdings Company, LLC (“M13”) or its affiliates. This content is for general informational purposes only and does not and is not intended to constitute legal, business, investment, tax or other advice. You should consult your own advisers as to those matters and should not act or refrain from acting on the basis of this content. This content is not directed to any investors or potential investors, is not an offer or solicitation and may not be used or relied upon in connection with any offer or solicitation with respect to any current or future M13 investment partnership. Past performance is not indicative of future results. Unless otherwise noted, this content is intended to be current only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. Any investments or portfolio companies mentioned, referred to, or described are not representative of all investments in funds managed by M13, and there can be no assurance that the investments will be profitable or that other investments made in the future will have similar characteristics or results. A list of investments made by funds managed by M13 is available at m13.co/portfolio.