Two small business FinTech startups announced Tuesday (July 31) that they have secured big venture capital funding rounds this week.
U.S. payroll startup Gusto announced $140 million in Series C funding provided by late-stage investors. Portfolios managed by MSC Capital, Dragoneer Investment Group, Y Combinator Continuity Fund and T. Rowe Price Associates led the investment, Gusto said, adding that existing investors General Catalyst, CapitalG, Kleiner Perkins, 137 Ventures, Emergence Capital and other investors also participated.
Gusto provides small and mid-sized businesses with payroll and human resources technology. Its offering includes a solution that provides employees with greater control over how they’re paid, and when.
In a statement, General Catalyst chairman and managing director Ken Chenault said Gusto has “created an incredible opportunity with small businesses.”
He added, “Gusto is supporting entrepreneurs and family-run companies that have been left behind by others while becoming the growing standard for small businesses.”
Earlier this month, Gusto announced a partnership with small business accounting firm Xero, allowing it to provide payroll throughout all 50 states in the U.S.
On the other side of the world, Australian challenger bank, Judo Capital, announced its own nine-figure funding round. The company raised more than $104 million in equity provided by the Ontario Pension Trust, Abu Dhabi Capital Group, Credit Suisse Asset Management and Myer Family Investments.
Judo Capital facilitates small business lending, and reports in the Sydney Morning Herald noted that co-founder and joint chief executive Joseph Healy emphasized SMBs’ demand for alternative finance sources as dissatisfaction with the nation’s Big Four lenders continues to rise.
Healy told reporters that policymakers have been helpful in linking small businesses to funding, but financing gaps remain.
“Dissatisfaction with big banks amongst small businesses has been evident in the market for a long time,” Healy told the publication. “This is emphatically not a FinTech, it is a return to old-fashioned banking.”