It’s a deal that will bring together payments and banking for freelancers, SMEs and also larger corporate clients across the UK and Europe

Amsterdam-based SME banking provider Finom is looking to expand its reach by acquiring UK-based cross-border payments startup Kapaga in a deal said to be worth eight-figures.

Finom launched in 2019 expanding to France, Italy and Germany where it offers a banking account aimed at SMEs and complete with invoicing and is similar to the offerings of Tide in the UK or Penta in Germany.

The acquisition emerged after Finom co-founder Kos Stiskin and Kapaga’s founder and CEO Katya Dorofejeva met on a ski trip hosted by their shared investor Target Global.

It’s a deal that will bring together payments and banking for freelancers, SMEs and also larger corporate clients across the UK and Europe.

Entrepreneurs and freelancers are the backbone of the European economy, producing $8 trillion of value annually, but costly and time-intensive bureaucracy means they cannot run their business as efficiently as possible, said Kos Stiskin, co-founder of Finom.

At Finom, we truly believe in the value of collaboration, and working with Katya (Dorofejeva, Founder and CEO of Kapaga) and her highly experienced team will enable us to create a product for SMEs that meets all our customers’ banking needs.

To date Finom has raised €16.8m across two seed funding rounds in 2020, while Kapaga raised £1.6m two funding rounds in 2020 and 2022.

Kapaga currently has a revenue run-rate exceeding £10m a year, serving over 200 UK SMEs and corporate with their international payments.

This merger solidifies two companies’ pursuits of providing tailored payment services for the entire continent, said Kapaga’s Dorofejeva.

She said: Entrepreneurs and freelancers are facing a plethora of challenges in setting up tactile business accounts that serve their needs. There is currently no continental fintech player that equally serves the UK and Europe in specifically targeting SMEs—until now!