Neo bank startup Oxygen raises $17M Series A funding to offer flexible banking solutions for small businesses

With thousands of banks in the United States, consumers and small businesses alike are still finding it increasingly difficult to obtain suitable bank loans to grow their business. Enter Oxygen, a San Francisco-based fintech startup and the first neo (challenger) bank in the US that offers both personal and business banking. Oxygen is a digital banking platform and a neo-bank that serves consumers, small businesses, and freelancers.

Oxygen is one of the new neo-banks, financial tech startups, that offer internet-only financial services and lack physical branches. Neobanks appeal to tech-savvy consumers who don’t mind doing most of their money management through a mobile app. Since launching in January of 2020, Oxygen has seen tremendous growth and engagement, surpassing 125,000 accounts opened and over a 969X revenue increase.

Oxygen is off to a great start in 2021 with new funding to build its banking platform for the 21st-century economy. Today, Oxygen announced it has raised a $17 million Series A round of funding to scale its team, accelerate growth, and continue to build best-in-class consumer and SMB banking products. The round was backed by Runa Capital, S7V, 1984.vc, EFG Hermes, Rucker Park, and Inventures, with participation from other celebrity and prominent fintech investors.

Originally founded in 2018 by Hussein Ahmed, The first and only neobank in the US to launch with both the consumer and small business in mind, the company continues to attract investment based on its rapid growth trajectory and highly engaged customer base. Oxygen app is currently available on iOS and Android, Oxygen users enjoy no monthly fees, no paperwork, early direct deposit, simple transfers, and cashback rewards on everyday purchases from approved merchants.

Based in San Francisco, Oxygen is backed by Runa Capital, Y Combinator, and other leading fintech investors. Oxygen banking services provided by The Bancorp Bank, Member FDIC. The Oxygen Visa  Debit Card and the Oxygen Business Visa Debit Card are issued by The Bancorp Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit cards are accepted.

“We are humbled that our investors are putting their faith in us with this most recent round of funding,” said Hussein Ahmed, Oxygen CEO. “This investment not only validates what we’ve built but also enables us to continue pursuing our vision of building financial tools that integrate seamlessly with the digital world of today and delight our customers. We founded Oxygen because we wanted to provide financial services in the same way people interact with technology in their everyday lives. We didn’t see that and believe this led to exclusion for many. This is an important milestone, but we are just getting started.”

Oxygen helps consumers, from digital natives seeking a better consumer banking experience that rewards them to sole proprietors and SMBs – many of whom are first-time small businesses struggling to manage multiple, variable income streams and like the holistic business banking experience that incorporates tools like LLC creation and expense management and the ability to manage both personal and business finances from directly within the Oxygen app.

“Oxygen is the premier banking platform for today’s digital consumer,” commented Andre Bliznyuk, General Partner of Runa Capital, which led the Series A round. “Their all-in-one banking app serves both consumers and businesses, ranging from tech-savvy consumers who are just looking for a better banking experience to burgeoning entrepreneurs and small businesses looking for digital banking solutions that meet their strict requirements. It’s banking done better.”

In addition to Oxygen’s compelling product suite, the company has cultivated partnerships with top-tier companies like Visa, having joined their Fast Track program earlier this year, while simultaneously building a high-value brand designed to empower customers to “do it their way,” in support of entrepreneurship and free-thinking.

Frank Strauss, longtime Deutsche Bank retail banking executive and former CEO of Deutsche Postbank Bank, who participated in the round and will act as a strategic advisor, views the company as having the right solutions at the right time, seeing Oxygen as ready to take advantage of a significant market opportunity in financial services. “When I witnessed the customer engagement around the Oxygen platform, I knew immediately they were offering something truly different for consumers and small businesses,” commented Strauss. “What’s more, I’ve been struck not only by the vision but also the ability of the management team to execute quickly.”