B2B money flows is a massive market worth trillions of dollars.

There have been waves of innovation to address the needs of businesses around this:

1. 1st wave: Digital payment infrastructure (think your Paypal’s and Stripe’s of the world)
2. 2nd wave: Digital payment rails for specific use cases (one example here is Primer’s proposition for commerce in the US)
3. 3rd wave: Digital workflows around payments (e.g., cash and account management SaaS)

While there has been consolidation around these different waves of solutions, there is none that has truly built a platform that

1. tackles all three waves of innovation
2. serves global business needs
3. covers a global scope of payment corridors, currencies, integrations, etc.

This is because of the inherent challenges driving adoption across each of the three waves:

1. Securing licenses to open up money movement
2. Driving SaaS adoption, if the fintech tackles it from the money management angle initially
3. Thick competition in payments, if the fintech tackles it from the money movement initially

What it takes to build a global treasury operating system, and why Finmo is doing it

This is where Finmo came in with a vision to build this unified platform — a global Treasury Operating System (TOS) — leveraging key advantages to overcome these challenges:

1. expertise and experience in payments tech and compliance across key GTM payment corridors (e.g., Australia-SEA). Their compliance expertise has enabled the company to quickly secure licenses and registrations across four markets to-date (Australia, New Zealand, Singapore and the US).
2. tackling the TOS with a modularized approach starting from money movement then automated workflows with integrations. The company has to-date launched FX and cashflow management products as well as integrations, on top of their initial money movement offering.
3. market entry (2021/2022) at a time of:
   1. increasing demand for diversification of cashflow management (especially in light of the bank runs in 2022),
   2. lowering costs to build and scale global companies (i.e., distributed teams, multi-market clients from day one),
   3. and emergence of more digital payment software and apps from banks (i.e., faster connectivity)

More on the implications of these advantages shared by CEO and co-founder David Hanna on our podcast:

Finmo’s recent Series A funding is prime example of global capital fuelling a first-of-its-kind global solution, in the case, the world’s first all-in-one Treasury Operating System (TOS). 

Apart from their mission building an all-in-one TOS, a few other things set Finmo apart:

(1) laid the foundation for their TOS on banking infrastructure connectivity with licenses and registrations in Australia, New Zealand, Singapore, and the US

🎙️ “That’s our moat, having the ability to connect directly into the banking infrastructure. To do that, you need licensing. You can control the end-to-end experience with our merchant base, and you should be robustly regulated.”

(2) modularized approach to building TOS to maintain world-class customer experience

🎙️ “You can use us for money movement, the FX piece, integration for AR, for AP, etc. We tackle client by client on a problem basis, rather than winning based on a price war, which ultimately ends up with the lowest bar winning.”

(3) the “Avengers” of payments coming together to build the all-in-one TOS

🎙️ “Our leadership team comes with at least 15 years of experience each, with most having 20 plus years. One reason we decided to jump in is that we don’t have just one aspect of the pie. We have the regulatory guy, the tech guy, the network, the sales, compliance, and more. We knew we could tackle each of the problems collectively in a way that hasn’t been done before.”

Finmo as a case study in Consolidation Phase Innovation

Zooming out, Finmo represents a new phase in innovation: consolidation.

Normally this consolidation phase would be driven by M&A but in this case Finmo has proven the potential of a new entrant to address fragmentation

Consolidation is the third in a cycle of phases:

1. Disruption: new solutions targeted at emerging “pain points” in status quo
2. Specialization: new solutions exploring emerging use cases previously unaddressed by (1)
3. Consolidation: new solutions, often the “holy grail” of the industry, bringing together fragmented approaches in (1) with the scope of (2)
4. Disruption: (3) will either have to self-disrupt or be disrupted by a new entrant tackling new “pain points” in the status quo

Interested in joining Finmo’s mission? See careers.

What other industries are in a “consolidation” phase of innovation?

Subscribe to our monthly newsletter for more insights into our portfolio companies and the broader trends in the capital markets and emerging market innovation.