Cash injection propels Rho into business banking

25 Oct 2019

Rho Technologies has launched a flagship banking platform for small businesses and start-ups following a cash injection of nearly $5m from investors.

US-based Rho Business Banking will enable businesses to apply for a full-service bank account in under three minutes.

The initiative – launched earlier this year – is the brainchild of former hedge fund manager and Deutsche Bank alum Everett Cook and British-Canadian entrepreneur Alex Wheldon – who helped build online fashion platform Lyst.

The service, which is designed to accelerate high-growth start-ups, charges no transfer or wire fees, includes interest on both cash and treasury accounts and has no minimum balances.

The platform’s API technology also provides workflow automation, allowing companies to connect to applications such as Slack, Quickbooks and Xero, plus nearly 250 others upon request, as well as team accounts that enable collaboration across an organisation.

In addition, Rho will offer up to $10m in Federal Deposit Insurance Corporation (FDIC) insurance, which safeguards the checking and savings accounts against the failure of banks, and 1.61 per cent annual percentage yield on cash management. The company also uses a same-day Automated Clearing House (ACH) service to enable faster payments.

Rho’s platform launch comes as the company secures $4.9m in seed funding. The funding was led by New York-based venture capital firm Inspired Capital – founded by former Learnvest CEO Alexa von Tobel and ex-US secretary of commerce Penny Pritzker.

“From personal experience, we believe small business banking is laden with outdated incumbents and missing a modern customer-first experience. This founding team is uniquely positioned to build a best-in-class solution for the next generation of founders, small business owners, and beyond,” said von Tobel.

According to Cook, many of the large banks in the US are failing small companies by only offering a something-for-everyone type service. “It generally means small businesses and early-stage companies become an afterthought. For us, that’s our only customer and our sole focus,” he added.

The company, headquartered in New York, is currently accepting limited clients before it rolls services out more broadly.