AI finance startup Flex doubles valuation to about $1.2 billion, source says

By Aditya Soni

July 14 (Reuters) - Flex, ‌an AI ​startup pitching ​itself as a one-stop shop for the banking needs of mid-sized business owners, said it raised $70 million in a round led ‌by Halo Fund, a venture firm co-founded by Utah Jazz owner ⁠Ryan Smith and Accel partner Ryan Sweeney.

The company did not disclose its valuation on Tuesday. ‌A person close to the ‌deal said the B1 round valued the three-year-old startup at around $1.2 billion, more than double its valuation six months ago.

Flex has now raised $180 million in ​equity and $300 million in debt to target what CEO Zaid Rahman calls "jumbo shrimps" - mid-sized businesses earning tens to hundreds of millions of dollars in ⁠annual revenue that are overlooked by traditional fintechs and mainly served by regional banks.

"In the U.S., there are ​maybe 350,000 to 400,000 business owners that manage 40% of America's payroll. So that's sort of in that segment," Rahman ​told Reuters.

"Globally, it's about 3 million business ‌owners that manage 50% of the global economy. So, there's a very large opportunity to be their kind of singular financial ⁠home."

Unlike AI startups targeting individual tasks such as accounting or expense management, Flex is bundling private credit, business finance, personal finance and payment tools into one platform. It ⁠offers AI agents, including Beacon AI, which give owners a weekly read on their business ​finances.

The company said it has "a few thousand customers onboarded" and is growing roughly four-fold year-over-year at a nine-figure annualized revenue run rate.

Flex will use the new funds to expand globally, ‌increase marketing and more than double its headcount to over 200 by year-end from 110. The latest round was ‌joined by returning investors including Portage Ventures and Crosslink Capital.

Separately, Flex on Tuesday launched ⁠Flex Global, a service that uses ‌stablecoins to move money ​across more than 100 countries in minutes, and lets business owners hold 32 currencies.

(Reporting by Aditya Soni in Bengaluru; Editing by ‌Sonia Cheema)

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