Affiniti, a fintech startup co-founded by Aaron Bai (20) and Sahil Phadnis (22), is revolutionising expense management for small and medium-sized businesses (SMBs), reminiscent of the solutions popularised by giants like Brex and Ramp. Following an impressive trajectory, the duo secured a remarkable $17 million in Series A funding from Signal Fire, just six months after raising $11 million in seed capital.
Affiniti caters to various SMBs, including pharmacies and HVAC businesses, by providing tailored expense management credit cards and software. While traditional banks like American Express and Capital One already offer numerous credit options, Affiniti’s founders believe their “v3” fintech product stands out. Bai defines this new approach as one that not only enhances user experience and access to financial data—characteristics of “v2” fintech—but also offers users real-time analytics and insights, addressing the lack of financial expertise among typical small business owners.
The fresh capital from the Series A round will enable Affiniti to expand its offerings, introducing features such as banking services, bill pay, cash flow analytics, and integrations with popular software solutions like ERP and point-of-sale systems. Currently, the platform provides customised cash-back rewards, support for QuickBooks, and short-term loans against invoices, which significantly benefit its client base.
Notably, unlike many young entrepreneurs, Bai and Phadnis did not come from a traditional startup incubator. They met while studying at UC Berkeley and leveraged their connections in Silicon Valley to access venture capital and form strategic partnerships with industry trade groups. This approach not only validated their offerings but also facilitated immediate access to benefits like group purchasing discounts.
Affiniti’s strategy has proven successful, growing from zero to 1,800 customers in just 14 months, with a transaction volume nearing $20 million monthly. The founders project that their platform could reach up to $1 billion in transactions by year’s end. Their revenue model, primarily based on transaction interchange fees along with SaaS sales and interest from short-term loans, has resulted in rapid financial growth. Although the founders remain tight-lipped about exact revenue figures, Phadnis hints at a tenfold increase over the past year, with revenue jumping from $1 million to an impressive tally.
The Series A funding attracted other notable investors, including Codie Sanchez’s Contrarian Thinking Capital, Yahya Mokhtarzada (founder of TrueBill), and Austin Rief (founder of Morning Brew), alongside seed investors like Indicator Ventures and Lightshed Ventures. Additionally, Affiniti has access to a significant debt facility that can expand to $50 million, adding to their financial leverage as they continue to disrupt the expense management landscape for small businesses.
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