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)
