Exclusive: Relay raises $50M for small-business banking
Illustration: Megan Robinson/Axios
Relay, which builds banking and money management software for small businesses, raised $50 million, CEO Yoseph West tells Axios exclusively.
The big picture: Small-business banking is moving beyond basic accounts to tools that help owners see how much cash they can actually spend.
Follow the money: General Catalyst's Customer Value Fund provided the financing, which Relay will use to increase its customer acquisition spend.
- The company previously raised about $51.5 million in funding, including a $32.2 million Series B round in May 2024.
Zoom in: Relay targets Main Street businesses with two to 50 employees that are too complex for freelancer tools but often too small to have a finance team.
- West contrasts that group with venture-backed startups using Ramp, Brex or Mercury, and solo operators using Novo, Found or Lili.
How it works: Relay lets owners split money across accounts for payroll, taxes, inventory and operating expenses, and route incoming cash based on rules they set.
- The platform also includes bill pay, invoices, cards, permission controls and an eight-week cash-flow forecast.
- Relay recently added term loans through Relay Capital, with financing provided by Fundbox or Lead Bank.
Between the lines: Relay is trying to make the business bank account the operating layer for small-business cash flow.
- "Most small-business owners check their bank balance. That's how they make financial decisions," West says.
- The company makes most of its money from usage, including float income, interchange, invoicing and payment fees.
By the numbers: Relay says it serves more than 150,000 small businesses and oversees more than $1.3 billion in managed deposits through Thread Bank.
- About 40% of Relay's business comes through company formation platforms, accountants and bookkeepers.
What's next: Relay sees an opportunity to build AI tools that help owners decide when to pay bills and how to bring in money faster
