Affiniti’s 20- and 22-Year-Old Founders Raise $17M Led by SignalFire
Affiniti, a fintech startup founded by Aaron Bai, 20, and Sahil Phadnis, 22, has secured $17 million in Series A funding led by SignalFire, just six months after closing an $11 million seed round. The company aims to provide expense management software for main street small businesses, mirroring the solutions utilized by tech startups.
Affiniti offers customizable expense management credit cards and software to SMBs, including pharmacies, HVAC companies, and auto dealerships. Their services resemble those pioneered by companies like Brex and Ramp, but Affiniti is targeting traditional small businesses that already have numerous credit card options.
According to Bai, Affiniti represents the “v3” of fintech. While v.1 consists of traditional banks and credit cards, and v.2 includes platforms like Brex and Ramp that improve UX design and financial data access, Affiniti focuses on providing end-users with actionable advice and analytics. “These traditional small businesses don’t have a finance team,” Bai stated.
The Series A funding will support the launch of new features such as banking, bill pay, cash flow analytics, and integrations with enterprise resource planning and point-of-sale applications.
Currently, Affiniti offers features like customized cash-back rewards, native Quickbooks “qbo” files, and short-term loans (up to 90 days) against invoices.
Unlike many startups, Affiniti’s founders didn’t come from Y Combinator. They met while attending UC Berkeley, which provided them with a strong network in Silicon Valley. They also partnered with specific industry trade groups, like those for independent pharmacies, to gain access to group purchasing discounts and validate their startup.
“We’re actually not trying to boil the ocean when it comes to working with every SMB in America,” Phadnis said. “We’re selecting a couple niche verticals with complex cash flow.”
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In its first 14 months, Affiniti has grown to 1,800 customers and approximately $20 million in monthly transaction volume. The founders project the platform will process $1 billion in transactions by the end of the year. The startup primarily generates revenue through transaction interchange fees, SaaS software sales, and interest income on short-term loans.
Affiniti’s revenue has grown approximately 10x in the past year. Other investors in the Series A round include Codie Sanchez’s Contrarian Thinking Capital, Yahya Mokhtarzada (founder of TrueBill), and Austin Rief (founder of Morning Brew). Seed investors Indicator Ventures, Lightshed Ventures, and RiverPark Ventures also participated. Affiniti has also secured a $15 million debt facility, with the potential to grow to $50 million.
