Small- to medium-sized business (SMB) finance app Coconut has notched approximately 2.5 million pounds ($3.15 million) through a Crowdcube fundraising. The company had initially aimed to raise 700,000 pounds ($881,000) at a valuation of 12 million pounds ($15.1 million), Crowdfund Insider reported.
Coconut has previously brought in growth capital through the site. It notched 1.8 million pounds ($2.27 million) in funding in 2018. The company reportedly has expanded to include 25,000 registrations over the past year. It is said to use open banking to free micro-SMBs from their financial institutions (FIs) as well as provide money management, according to Crowdfund Insider.
The aim of Coconut is to offer micro-business accounting services and have their assets as well as funds be more effective through the help of smart treasury management.
There are said to be 5.3 million micro-SMBs and self-employed people in Britain. But Coconut Co-Founder and CEO Sam O’Connor said per the report that just 3 percent of companies change accounts annually even with the rise of challenger banks, while the closings of bank offices are impacting how businesses owners and FIs relate to each other.
As PYMNTS reported in October, clients who had a current credit card or account with a number of the major main and challenger FIs had the ability to link their accounts to Coconut beginning last November. At the time, it was noted that 500 accountants and 15,000 individuals were already using the tool, which lets sole proprietors and limited SMBs handle their business finances.
Open banking, which was rolled out in 2016, made the nine biggest banks in Britain let their clients securely share their financial information with third-party apps to strengthen competition, provide better offerings for consumers and foster innovation. Coconut was said to be among the first approved third-party providers. It was also one of the six winners of an international competition that provided grants to companies harnessing open banking application programming interfaces (APIs) called the Nesta Open Up Challenge.