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Revolut alumni raise millions for Vault, a startup offering banking services to Canadian SMEs

Skipan online banking platform serving small and medium-sized enterprises (SMEs) in Canada, is launching to the public today after raising $3.7 million in seed funding.

Founded in late 2021 by Saud Aziz and Ahmed Shafik (who previously worked at Sunday, Revolut and Koho), Toronto, Ontario-based Vault says its mission is to “revolutionize” the banking experience for Canadian entrepreneurs and SMEs by giving them a place” to manage their money more efficiently while saving on costly bank fees.

Vault touts the ability to sign up customers – in this case entrepreneurs and business owners – “quickly” or in less than five minutes.

While startups offering banking services to SMEs abound in the United States, they are much less common in Canada, Shafik told TechCrunch. His and Aziz’s parents were small business owners. So the couple got to see firsthand the challenges they faced when it came to managing their finances.

“In Canada, there are five major banks, so many business owners have to deal with outdated processes, like going to a branch to wire $50,000, on top of paying exorbitant fees” , he added. “What you have on the American side with Mercury, Brex and Ramp – it just doesn’t exist here. People are used to going to an agency, calling an agency manager just to deal with day-to-day banking transactions.

Shafik recognizes that there are products for specific use cases. For example, Canadians have access to TransferWise to make transfers, or to credit unions if they want to take out a credit card or a loan. But for banks in general, the options are limited.

“It took us about a week and a half to open our business account,” Shafik said. “In Canada, we are probably three to five years behind.

Vault customers, the startup claims, pay no monthly or annual fees and don’t have to incur a minimum balance. Features include the ability to have local accounts in CAD, USD, GBP and EUR to hold, send and receive funds; a real-time currency exchange that she says is “10 times cheaper” than the big banks; a multi-currency Mastercard corporate card with 1% cashback; expense management for employees; free domestic and international bank transfers to 180 countries and accounting integrations “to automate accounting”.

Vault also announced the ability to purchase investment products, including GICs (guaranteed investment certificates) which it says will earn up to 5.00%. Its aim is to expand its offerings to include loans, savings products, payment automation and more complex foreign exchange products later this year.

Gradient Ventures and Fin Capital co-led Vault’s US$3.7 million fundraising round, which closed last year and included participation from The Fintech Fund, Exponent Capital and Thirdbase Capital. The company’s angel investors include founders and executives of companies such as PayPal, Google Pay, Affirm, BNY Mellon, Airbnb, Coinbase, Revolut and Robinhood.

Vault says it partners with regulated financial institutions and its customers can see which financial institution holds their funds through their accounts page. Its Mastercard is issued by Peoples Trust Company.

Build infrastructure from scratch

Shafik said Vault spent its first year building the infrastructure for card transfers and account products in-house.

“The infrastructure for fintech is practically non-existent here [in Canada]”, he told TechCrunch. “We don’t have products to build on. You have to build the infrastructure in-house, be diligent with banking partners to deliver compliance programs, and launch from from zero.

Vault targets all industries, Shafik said, and initially piloted with about 25 companies. Now, he said, the startup is “growing in the 100s a month.” Companies ranging from two employees to 100 are users, he said, with the company’s sweet spot so far being in the “100 employee mark”.

Vault co-founders Ahmed Shafik and Saud Aziz. Picture credits: Skip

As for revenue, Vault claims to make money from interchange and transaction fees.

“WeI’m honestly excited to walk out the door with a product that’s ready to replace your entire battery on day one, rather than just coming up with one product and building over time,” Shafik said. “The reception from Canadian companies has been excellent, where they are using us as their main account or at least trying us out for a vertical.”

zack Bratun-Glennon, founder and general partner of Gradient Ventures, believes that Canada “is a market with unique financial services and technology needs.”

He wrote via email, “It has a high volume of cross-border transactions, a large number of multinational and distributed employee bases, and is a growing hub for innovation.”

Despite the opportunity, Bratun-Glennon also notes that Canadian financial services have been slow to adopt new technologies, compared to larger markets like the US and EU.

“Most companies rely on traditional banks or a few niche fintech solutions. Vault’s platform can replace a company’s entire financial stack,” he added. “One of Vault’s standout features is its multi-currency functionality. This allows businesses to make and receive payments in multiple currencies, without having to worry about high exchange rates or excessive transfer fees. .

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