Michael Rangel of Novo
An exclusive Tech Tribune Q&A with Michael Rangel (co-founder and CEO) of Novo, which was honored in our:
Tell us the origin story of Novo – what problem were you trying to solve and why?
I’ve been working since I was a kid, and first got into finance at the age of 19. As an undergrad, I wanted to launch a business, but thought I needed more knowledge, more money, or more connections.
I moved up to New York City in 2015 and started taking classes at Columbia University, as I thought an MBA program was going to be my next step. Around that same time, I was talking with a longtime friend of mine about launching something to become the proverbial ‘startup bank’, as we had both experienced the problems with small business banking in our own right. We started working on Novo in 2016, and launched in 2018.
Over the last three years, Novo has emerged as one of the most popular digital banking platforms for small businesses. Novo has more than 100,000 customers, and was named one of CNBC’s “Best Business Checking Accounts of 2021”, and the “Most Innovative Bank in North America” by the The Banker (part of the Financial Times).
These awards are a testament to how our team has innovated in the small business banking space. Many digital banking platforms for small businesses feature limited functionality when it comes to integrating with e-commerce platforms. Others might have robust functionality, but have difficult-to-use interfaces, or high fees for maintenance, ATM usage, and more. Small businesses have switched to Novo because our digital-first banking platform offers robust functionality and an intuitive interface for e-commerce payments – completely free of charge and without minimum balance requirements
What was the biggest hurdle you encountered in your journey?
In the early days of the pandemic, we reduced expenses across the board to increase financial runway as much as possible. It was a really difficult period for a lot of people as priorities got shuffled around, budgets were slashed, and some people had the wind taken out of their sails.
Thankfully, we didn’t have to make any layoffs because we were already operating pretty lean, but we did take a pretty hard stance on salary increases across the company. Basically, we didn’t have to fire anyone, but no one was getting raises until we came out on the other side of this thing.
As we got to mid-2020, COVID-19 began accelerating small business adoption of digital banking platforms. During the summer of 2020, our team began to see incredible growth in Novo’s customer base, which has continued through 2021. Novo recently closed $41M in funding, and we are focused on growing our team and building Novo’s next generation of small business banking applications.
What does the future hold for Novo?
As we look toward the future of small business banking, one area that particularly intrigues me, and an area that our company is actively working on, is how technology can help small businesses improve cash flow. For instance, if we can help a small business reduce the time it takes to receive payments from e-commerce sites like Shopify from a few days to a few seconds, that small business will have the opportunity to use that money more quickly for things like payroll or capital expenditures.
Novo will use its Series A funding to continue building out a best-in-class digital banking platform for small businesses, with a focus on helping business owners simplify their finances and optimize their cash flow.
What are your thoughts on the local tech startup scene in Miami?
What excites me most about Miami is that the city has been waiting for decades for a startup boom like the one it’s seeing now. This is evident in the combination of incredibly innovative companies, and the availability of venture capital funding to support those companies during their early stages of growth.
What’s your best advice for aspiring entrepreneurs?
In terms of leadership skills, one of the biggest things I learned during 2020 was how to deal with uncertainty and radical change. As a startup leader, you have to embrace flexibility and transparency more so than ever before.