UK’s ANNA raises $21M for its SMB-focused business account and tax app – ProWellTech
Small and medium-sized enterprises and individual merchants account for the vast majority of businesses globally, 99.9% of all businesses in the UK alone. And while the existence of millions of separate companies, with their individual needs, speaks of a fragmented market, together they still represent many opportunities. Today, a British fintech startup that is trying to profit from it is announcing a round of growth funding to enter Europe after embarking 20,000 customers in its home country.
ANNA, mobile banking, tax accounting and financial services assistant for small and medium-sized businesses and freelancers, closed a $ 21 million investment round by a single investor, the ABHH group, the sometimes controversial owner of Alfa Bank in Russia, the Amsterdam Trade Bank in the Netherlands and other companies.
The investment is strategic: ANNA will use the funding to expand outside the UK for the first time in Europe, and CEO Edouard Panteleev said the effort will be built on the tracks of the Amsterdam Trade Bank. He confirmed that the investment valued ANNA at $ 110 million and that the founders retain 40% control of the company in the agreement.
Fundraising began before COVID-19 really picked up speed, but its chilling effect on the economy also had a direct impact on the same activities that ANNA is targeting customers: some have seen drastic reductions in business and some have closed their businesses entirely.
Despite this, the situation has not changed measurably for ANNA, Panteleev said.
“So far Covid-19 has not influenced us. We are designed as a digital business, and therefore working from home has been a completely normal step for us,” he said, but added that when it comes to customers, “Yes, we have seen that our customers’ incoming payments are quite affected, with a 15-30% reduction in the volume of customer payments. ” The firm belief that ANNA and investors have, however, is that the business will resume and ANNA wants to make sure it is in a strong position when it does.
ANNA stands for “Absolutely No Nonsense Admin” and explains the essence of what it intends to do: it provides an all-in-one service for small businesses that allows them to manage a corporate account to make and receive payments, together billing, accounting and tax management software that runs through a chat interface to help you and automate some of the features (such as invoice tracking). ANNA also offers additional services, such as connecting to an accountant during the tax season.
ANNA is part of a wave of fintech start-ups that have been formed in recent years specifically aimed at SMEs .
In the past, SMEs and freelancers were drastically underestimated in the world of financial services: their activities, even collectively, are not as profitable as the accounts of large companies, and therefore there was little innovation or attention paid to how to improve their experience or offers, and therefore all that traditional banks had to offer was what they had.
Everything has changed with the rise of “fintech” as a salient category: smartphones and the use of increasingly intelligent apps are now omnipresent, broadband is cheap and also widespread, the cloud and other technologies have turbo charged on what people can do it on their devices and people are just more digitization experts. A wave of start-ups has taken advantage of all this to develop fintech services for SMEs, which has also led to competition from the likes of Monzo, Revolut, Tide and now also offered by high-level banks such as NatWest.
Panteleev believes that ANNA products are separate from these. “We offer more than one financial assistant to users, rather than moving their money, and it’s also a different business case, because we look at what a user needs in a more holistic way,” he said. Prices are also slightly different: companies with a monthly income of less than $ 500 can use ANNA for free. He then climbs on an escalator to a maximum of £ 19.90 per month, for those with a monthly income of between £ 20,000 and £ 500,000.
Panteleev – who co-founded the company with Andrey Pachay, Boris Dyakonov, Daljit Singh, Nikita Filippov and Slava Akulov – is a repeated entrepreneur, having founded two other banking startups in Russia with Dyakonov which are still in progress, Knopka (Russian for button) and Totchka (Russian per point). These are older and more established: Totchka, for example, has around 500,000 users, but Panteleev said there are no plans to attempt to bring ANNA to the Russian market, nor to bring these other companies internationally.
For ABHH, the attraction of investing in this particular startup has probably been twofold. Companies have in common the Russian DNA, which potentially represents a better cultural measure, but it is also another example of inheritance, a large bank that draws on a smaller startup and more fleet of feet to turn to a market sector that bigger company could be more challenged to do it alone.
“I am looking forward to this exciting journey together,” said Alan Vaksman, a member of the Amsterdam Trade Bank supervisory board and future president of ANNA, in a statement. “Most SMEs are in a difficult situation right now, however, once the pandemic is over, there will be a clear understanding that neither businesses nor family businesses can afford to perform most of the operational processes manually. Technology services and platforms, such as ANNA, are waiting for dynamic times. “