September 29, 2021

Announcing our Series A

Parafin is thrilled to announce that it has raised $34 million in seed and series A financing, led by Ribbit Capital and Thrive Capital.

Today we are excited to announce Parafin, a company designed to power the next generation of financial services for more than 200 million small businesses around the world. Having dedicated the last year to building infrastructure to serve several of the world’s largest platforms and their sellers, we are thrilled to share that we've so far raised $34 million in seed and series A financing, led by Ribbit Capital and Thrive Capital. We’re proud to introduce as Parafin investors SV Angel, Hans Tung, Plaid CEO Zach Perret, DoorDash Co-Founder and CPO Stanley Tang, Robinhood CEO Vlad Tenev, Robinhood Co-founder Baiju Bhatt, Chime Co-founder and CTO Ryan King, Carta CEO Henry Ward, and Jaren Glover of Robinhood, and to welcome Nick Shalek and Gaurav Ahuja to the Parafin board.

During our early days at Robinhood, we had the opportunity to experience firsthand the challenges of building infrastructure with the potential to democratize finance for consumers. But even as equity markets rebounded at the height of COVID in 2020, we watched small businesses struggle to navigate a system that looks nearly indistinguishable from how it did forty years ago: “relationship” bankers, guarantees that put a business owner’s personal assets in jeopardy, inequitable access based on race and gender, and interminable processes of filling out paper forms and awaiting manual decisions on loan applications. As immigrants from small business families, we’ve seen how important reliable access to financial services is and how challenging and impersonal the system can be.

Just as the flaws in today’s system became more glaring during COVID, much of the world experienced an unprecedented boom in small business creation. In the U.S. alone, small business formation over the last year was 18 times higher than its average in the previous decade. Tens of millions of small businesses, creators, and entrepreneurs in this new era will demand affordable and instant access to financial services from an archaic system that is ill-equipped to meet their needs.

To rise to this challenge, we launched Parafin. Parafin is embedded financial infrastructure that serves small businesses better, faster, and cheaper. We work with the platforms that small businesses already use — such as marketplaces, payment processors, and software providers — to help sellers, creators, and entrepreneurs bridge their cash flow needs, invest in their growth, and focus on what they do best: running their business. Parafin’s first product is capital-as-a-service. We power these capital programs by absorbing all risk and abstracting away the complexity of capital markets, underwriting, support, servicing, and origination — functions that don’t make sense for platforms to build from scratch but make sense for Parafin to build at scale.

We’ve been working on Parafin since last year and are proud of the partnerships we’ve been able to build, as we now quietly power financial services for marketplaces, payment processors, and software providers that support over half a million businesses and $60 billion in sales. But what we’re most proud of is to have served small businesses when they were most in need: the restaurant that knew their A/C was about to die and had to replace it or be forced to close down, the independent trucker hit by the Texas ice storm, the childcare center coming out of a long difficult lockdown, the fitness studio that needed to move suddenly to outdoor activities, and many more.

We have a novel and ambitious product roadmap to execute in the coming months as we reimagine the financial services infrastructure that powers the world’s entrepreneurs and job creators. Our team today is a tight-knit team of engineers, designers and operators hailing from organizations such as Affirm, Robinhood, Uber, Facebook Financial, Amazon, and CERN. We care deeply about our mission, our colleagues, and the sellers we serve. Come join us! parafin.com/careers.

— Sahill, Ralph, and Vineet.