Small and medium-sized business owners consult their bank balances daily to make financial decisions. But it is entrepreneur Yoseph West’s claim that bank accounts are typically missing information and features that owners could actually use.
“SMBs represent 44% of US GDP, sustain the economy, and have a profound impact on all of us,” West said in an interview with TechCrunch. “And yet, most SMEs only have enough cash on hand for 27 days. “They need greater clarity and control of cash flow in their banking.”
West, who studied equity and debt financing in college, co-founded Vuru, a stock market research app, in 2012. After fintech company Wave Accounting acquired Vuru that same year, West stayed on and eventually graduated as director of product engagement. .
While at Wave, West came up with the idea for his next venture: Relay, a commercial banking and money management service for SMEs. West partnered with Paul Klicnik, a former IBM engineer who previously developed the core technical infrastructure at coupon app Flipp, to launch Relay in October 2018.
“Relay is an online business banking and money management platform designed to help small businesses take control of their cash flow,” West explained. “The platform is focused on delivering true cash flow clarity to SMEs.”
Relay’s platform allows SMEs to organize their income, expenses and reserves in up to 20 current accounts. (Relay is not a bank itself; the company relies on its partner Thread Bank for the banking services it offers, which West says are FDIC-insured.) Through Relay, a business can automatically reserve cash in savings accounts at a 1% discount. 3% APY and issue up to 50 physical or virtual Visa debit cards to employees.
Relay users can send and receive ACH transfers, wire transfers, and check payments just as they would with traditional banks. And they can capture and store receipts, allowing employees to access them through role-based accounts.
The company makes money through interest on customer deposits, card interchange fees and a $30-a-month premium service (Relay Pro) that adds features like same-day payments and competes with neobanks like Bluevine and Mercury. But West maintains that Relay is one of the few of its kind that doesn’t focus on tech startups or individual business-owning clients.
“Relay is designed for the more than 33 million SMBs in the U.S. and their in-house or outsourced finance functions,” he said. “We primarily serve small businesses in the ‘heartland of America’ that have more than 2 employees (full-time, part-time, or contract) and earn between $20,000 and $200,000 per month.”
This has proven to be a winning strategy.
West predicts Relay will reach $100 million in annualized revenue by the second half of 2025. Revenue increased 3x in 2022, and nearly 6x in 2023, thanks to a strong customer base that now stands at ~100,000 businesses .
This is even more impressive considering the state of the fintech industry.
Last year, venture investment in financial services and fintech fell to $43 billion, its lowest level in six years and a drop of more than 50% year-over-year from the $89.5 billion invested in 2022. according to CrunchBase. The austere funding environment contributed to the collapse of fintechs like Synapse, the banking-as-a-service startup whose bankruptcy has impacted the finances of millions of customers.
To help lay the groundwork for expansion into new spaces, including expense management, credit and financial APIs, Relay this week closed a $32.2 million Series B round led by Bain Capital Ventures with participation from BTV , Garage, Industry Ventures and Tapestry. The new cash brings the total raised by the startup to $51.6 million.
“We chose to increase because of our growth rate,” West said. “To truly get predictive cash flow analytics, SMBs need a unified view of cash inflows and outflows in their back office. “Relay is moving toward that vision…In the future, the platform will make intelligent recommendations to small businesses based on what is happening across their entire back office.”
Toronto-based Relay plans to increase its workforce from 140 people to 200 by the end of the year.
