Parafin Transforming Delivery of Small Business Financial Services Closes $100M Series C

Funding from traditional sources such as banks has historically been a major challenge for small businesses. Fintech startup Parafin innovatively tackles this challenge through its embedded finance infrastructure used by partners such as DoorDash, Amazon, and others.

“Since we launched Parafin , our mission has been to empower small businesses with financial services. Small businesses are the backbone of the American economy yet banks do not have their backs,” says CEO and co-founder Sahill Poddar .

Founded in 2020 by Poddar and Vineet Goel , the startup has provided nearly $1 billion in annual funding for tens of thousands of small businesses in the U.S. and Canada. Its embedded infrastructure powers financial services for marketplaces, vertical SaaS, and payment platforms.

The two co-founders leveraged their tech backgrounds to pursue an entrepreneurial opportunity. Poddar previously was Head of Machine Learning Engineering at investment platform Robinhood following his position as Data Scientist at Meta. Chief Product Officer Goel, also previously at RobinHood, was Head of Risk and Fraud Engineering following his position as Software Engineer at Quantifind.

The team’s success comes from Parafin’s single integration of a full suite of financial products into clients’ platforms that are customized for use by their small business sellers. The products include access to capital, spend management, and savings tools.

The company’s machine learning-based risk models train on millions of small business performance data to determine eligibility, offers, and pricing. Credit scores and personal guarantees are not part of their model.

“Parafin’s focus is clear: To grow small businesses via financial services on digital platforms they use everyday. By embedding financial services directly into the platforms where businesses already operate, the company helps drive growth, loyalty, and retention for platforms while empowering small businesses to thrive,” said Goel.

The recent closing of a $100 million Series C financing at a $750 million valuation positions the company for accelerated growth. Backers include the Round’s lead Notable Capital, with significant participation from Redpoint Ventures and existing investors Ribbit Capital, Thrive Capital, and GIC.

The latest round of additional investor support shows their confidence in Parafin’s approach to embedded financial services and its long-term impact on how small businesses access capital and manage their operations.

“This funding is not just a milestone for Parafin but an investment in the future of small businesses. With our machine learning-based risk models and enterprise-grade infrastructure, we’re redefining how financial services are delivered in a digital-first world. This new capital will allow us to scale existing products, ship new products, expand into new geographies, and deepen our partnerships with platforms that support the global small business economy,” explained Poddar.

The technology-driven financing decisions benefit women and minorities who have experienced discrimination in the past when borrowing.

“Incumbent methods systematically bias against women- and minority-owned businesses. This has historically hindered small business growth. At Parafin, we’ve worked tirelessly to construct our entire company — from our products and teams to our processes — to solve this problem,” Poddar said.

Parafin’s relationship with client DoorDash showcases how Parafin’s technology works. DoorDash is able to offer revenue-based financing to its eligible merchants who see a pre-approved advance amount in their Merchant Portal.? If they accept Parafin’s offer, they receive the funds in their bank account in 1-2 business days with no additional paperwork required. Accepting an offer also has no impact on a credit score.

The Merchants pay a one-time fee over the duration of the advance with no hidden charges, no recurring interest, and no prepayment penalty. Repayment is automated, based on a percentage of DoorDash sales and on business performance. This is more flexible than fixed payment periods.

Hans Tung , Managing Partner at Notable Capital and a new board member of Parafin, shares what made the startup an attractive investment.

“What immediately drew us to Parafin was their differentiated approach to solving small business financing at scale through strategic partnerships with the world’s largest platforms…This is beyond lending — it’s about empowering these businesses through data analytics to grow with the digital economy.”