Rho Technologies, the financial technology parent of Rho Business Banking, is going after the accounts payable market with a new tool and new funding.
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Rho, headquartered in New York, brought in a $15 million Series A round led by M13 Ventures with participation from existing investors Torch Capital and Inspired Capital. In total, the company has raised just under $20 million in venture-backed capital since its inception in 2018, Everett Cook, co-founder and CEO of Rho Technologies, told Crunchbase News. Rho previously raised a $4.9 million seed round in 2019 led by Inspired.
Cook, a former hedge fund analyst, saw how commercial banking was not keeping up with the pace of traditional banking–often the experience is disconnected.
“We decided to take commercial banking, the entity with few technologies and is the least connected, and bring it to the center of the business because all facets of a company have interactions with finances,” he said. “We are competing against the legacy banks in what we think is a new field where not many people are playing.”
Cook intends to invest the proceeds in growing the product, developing more seamless integration between operations and finance, and its go-to-market strategy.
In addition to the funding, the company also launched Rho AP, a platform enabling companies to run full accounts payable within Rho in which invoices are uploaded, approved, coded and paid.
Cook has built a team of 35 employees and expects to add more in the coming year, especially in the areas of finance, tech, business banking, engineering, product and marketing.
Although the company was founded in 2018, Rho has kept a low-profile, getting most clients from word-of-mouth. Despite that, the company was handling more than $2 billion per year in annualized transaction volume for its clients as of December 2020, Cook said.
“Growth has been astonishing,” he added. “We didn’t realize how much pent up demand there was. Even into January, we are up 15 times and not slowing down.”
Latif Peracha, general partner at M13 and a Rho board member, said his fund is primarily consumer-focused, but is seeing the line between enterprise and consumer blurring. He learned about Rho from several of his portfolio companies that were using its platform.
To him, it showed that Rho was filling a void that M13’s companies had, and when he dug further, was helping countless other businesses run better as well.
“It was a massive ‘a-ha’ moment,” Peracha said. “There is no one in the market that has these core front-end and back-end functions and a tremendous level of convenience. All of these things are in abundance on the consumer side, but not there on the enterprise side.”
Illustration: Dom Guzman