Affiniti Raises $17M Series A for SMB Expense Management

Affiniti Secures $17M Series A to Revolutionize SMB Expense Management

Affiniti, the innovative expense management platform founded by 20-year-old Aaron Bai and 22-year-old Sahil Phadnis, has raised a $17 million Series A funding round led by SignalFire. This comes just six months after the company secured an $11 million seed round, highlighting its rapid growth and market traction.

Affiniti provides small and medium-sized businesses (SMBs) like pharmacies, HVAC companies, and auto dealerships with customizable expense management credit cards and software. This offering mirrors solutions pioneered by companies like Brex and Ramp, but with a focus on delivering advanced analytics and financial advice tailored for SMBs.

Affiniti: The Next Generation of Fintech for SMBs

According to Bai, Affiniti represents "v3" of fintech. He positions traditional banks and credit cards as "v1" and companies like Brex and Ramp as "v2," which improved user experience and data access. Affiniti aims to go further by providing actionable analytics and financial guidance to SMBs that often lack dedicated finance teams.

"V3, in our opinion, is a fintech product that can actually advise the end users and give them analytics," Bai says. "These traditional small businesses don't have a finance team."

The Series A funding will enable Affiniti to expand its product offerings. Planned features include banking services, bill pay functionality, cash flow analytics, and integrations with popular software like enterprise resource planning (ERP) and point-of-sale (POS) applications.

Affiniti currently offers features such as customized cash-back rewards, native QuickBooks (QBO) file integration, and short-term loans of up to 90 days against invoices.

Strategic Partnerships and Rapid Growth

Unlike many young founders, Bai and Phadnis did not participate in a startup accelerator program. Instead, they leveraged their network from UC Berkeley to connect with investors and forged strategic partnerships with industry trade groups. This approach provided access to potential customers and valuable features like group purchasing discounts.

"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."

This targeted strategy has fueled impressive growth. In its first 14 months, Affiniti has acquired 1,800 customers and processes approximately $20 million in monthly transaction volume. The founders project reaching $1 billion in transactions by the end of the year.

Affiniti primarily generates revenue through transaction interchange fees. It also generates revenue through SaaS software sales and interest income on short-term loans. While the founders declined to disclose specific revenue figures, Phadnis indicated a tenfold year-over-year growth.

Other Series A investors 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 previously secured a $15 million debt facility, expandable to $50 million, alongside its seed round.

For more information, visit Affiniti.