In July, we put together a list of the top eight challenger banks in the U.S. SMB space, and Rho wasn't even on it. Fast forward 6 months and Rho has equaled the funding of its primary competitors (not including Grasshopper Bank which has raised almost twice as much as the other 8 private companies combined) thanks to a $15M round this month (see the updated table below).
The challengers all have their own unique selling propositions. Rho has positioned itself for the more sophisticated business touting its $75M in deposit insurance (via a network of FDIC-insured banks), QuickBooks integration, accounts payable tools (ala Bill.com), low-cost FX and global transfers and even access to venture debt providers. There's more on its homepage than Chase Bank.
Which is a bit of a problem from a marketing UX standpoint. While these are valuable benefits, they can take an accountant to really appreciate (for example, see the 3-min overview above from SMB accounting and business service provider Kruze Consulting). Perhaps the startup will initially grow fast enough through referrals. But if hopes to attract new customers directly from website search, it needs a story that's easier to comprehend during that crucial 20-second first impression. Presumably, some of that $15M will go into focus testing and developing simpler messaging.
But that's nitpicking. We are impressed with what they've built so far and look forward to watching them deploy its VC stockpile.
U.S. Small Business (SMB) Challenger Banks by Funding Amount
|Seed (Cross River)||2014||SF||ina||$5.2M|
|Source: Crunchbase; monthly website visitors per SimilarWeb, SEMrush, 15 Jan 2020|
Funding: $19.9M (per Crunchbase)
Traction: 9,000 monthly visitors (per SEMrush)
Rho bank 1-min promotional video