Investing in Rho: Building a Better Commercial Bank

M13 is leading the $15 million Series A for Rho, a banking platform for small and mid-size businesses.


We’re excited to lead the $15 million Series A in Rho, which is providing a better banking solution for high-growth, scaling companies.

It’s no secret that the lines between enterprise and consumer have blurred. By leveraging strong referral networks and word of mouth to drive organic growth, great brands can be built across both that lead with design and product to fill a clear need for a core customer. Square, Slack, and Superhuman are all companies that come to mind.

In a short amount of time (est. 2018), Rho is building a trusted brand in business banking that leverages these tenets with a focus on the growing enterprise and specifically its CFO as the core customer. Rho uses software to make their decision-making easier, and in a remote, decentralized and increasingly turbulent world, this is crucial. We know this is not a new market, but it’s a big one: $178 billion across enterprise, SMBs, and solopreneurs.

There are legacy players and upstarts tackling it, but significant issues persist: According to Deloitte, 50% of the finance team’s time is spent on manual data extraction, while only 23% of accounts payable teams process vendor invoices automatically and only 19% of finance teams have automated controls for approvals.

Rho is solving these issues by combining core front-end banking and credit products with proprietary back-end products including accounts payable, expense management, and remittance. Multibillion-dollar companies have been built at each layer of this product stack (i.e. Transferwise, Expensify, but by integrating these services all on one platform, Rho is providing its customers with a seamless, trusted experience. Rho’s offerings help simplify setup and launch while making the relationship with customers (which, on average, last well over a decade) incredibly sticky.

The best companies delight their customers with service levels previously unavailable, and Rho is doing so by leading with its own proprietary software to make sure it can fully maintain the customer journey and experience.

We were introduced to Rho by one of our portfolio companies that was using it for their banking needs. We then discovered during diligence that another M13 portfolio company was also independently using Rho. This gave us the most natural proof of product-market fit, and as an operator-driven firm with partners who had experienced this problem acutely in past lives, we strongly believe this is a real need for all growth companies.

The other sign of the product-market fit is the numbers: the business has grown 15x since January 2020 and now manages $1.9 billion of annualized transaction volume, and we expect sustained growth through 2021. All of this has been done with no marketing to date, simply on the back of a very small sales team and strong word of mouth.

We’re so excited to partner with Everett Cook and Alex Wheldon, who are incredibly complementary co-founders: Everett brings a keen understanding of financial services markets from his time working as a macro hedge fund analyst at Point72, while Alex is a serial entrepreneur with success in ad tech, gaming, and fashion—including Kanary, Smarkets, and Lyst—due to his ability to build great, beautifully designed products.

Rho's Co-founders Everett Cook and Alex Wheldon

Welcome Everett, Alex, and the whole Rho team to the M13 family—we look forward to working with you for years to come.

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