US-based Nearside, the online bank for SMEs formerly called Hatch, has announced it has raised a USD 58 million in Series B funding round led by Valar Ventures., seven months after announcing its Series A.
Founded in 2019 and based in San Francisco, Nearside says it focuses on “the smallest of the small businesses”, catering to “the 60 million hard-working sole proprietors, solopreneurs, freelancers, contractors, and gigsters who work and build their local communities in the United States”.
The company last raised $14 million in a Series A round in April 2021.
After founder and CEO Thomson Nguyen’s last startup, Framed Data was acquired by Square, he became entrepreneur-in-residence at Kleiner Perkins. There he found that many small business owners don’t have the cash flow to maintain business checking accounts without paying hundreds of dollars in overdraft fees per year.
The latest round was led by Valar Ventures, with participation from Kleiner Perkins, Foundation Capital, Breyer Capital founder Jim Breyer, Creative Artists Agency founder Michael Ovitz, Flexport founder Ryan Petersen and Eventbrite founder Kevin Hartz.
Nearside provides free small business checking accounts with no monthly fees, overdraft fees, or ATM fees, as well as an unlimited, universal 1% cashback reward debit card program that is unequalled in the banking sector. To help customers save even more money, Nearside also launched Premium Cashback Rewards that stack on top of the 1% Universal Cashback rewards, providing up to an additional 5% back on merchants like Amazon, Walmart, Shopify, Squarespace, Xero, and more. The application process is simple and fast for anyone who wants a cashback debit card for their business.
Nearside is a new brand as the company changed its name from Hatch earlier this month. “This name is inspired by our commitment to supporting our customers – and to always be by their side through the ups and downs of building a business,” explains Thomson Nguyen, founder and CEO.
Nearside offers a free small business checking account that comes with a debit card. The pricing is “simple and transparent”, Nguyen states. There are no monthly fees, overdraft fees, or ATM fees, and there is an unlimited 1% cash back reward programme “that is unequalled in the banking sector”.
Nguyen said that Nearside wasn’t planning to fundraise anytime soon after its last funding announcement, but “this Series B ended up being very opportunistic and allows us to build additional products to help our individual and small business customers start and grow,” especially as more SMBs began to return as the COVID-19 pandemic gradually subsides.
The startup changed its name to Nearside “because we wanted to find a name that resonates with our customers at all stages of their business journey — from the individual freelancer to the incorporated LLC owner, and beyond,” he said.
Next year, the company will move into term loans and other software services like Sprout (business registration). It will also continue to grow its rewards programme.
“By offering top-tier rewards to people who may not have access to credit cards with rewards, we’re democratising access to fair financial services and helping our customers save and reinvest the money back into their business,” Nguyen says. “For new businesses, cash flow is everything and every dollar counts.”