Small businesses have been devastated by the pandemic and neighborhood schools and studios are no different. There has been a wave of innovation that empowers these small businesses to rapidly digitize to address changing customer preferences. Finli is the small business management platform and payment solution for these family-centric businesses that have been traditionally reliant on paper and pencil models. On the platform, parents and caretakers connect their bank accounts or credits to schedule and process payments for their children’s education, while schools and studios can invoice, streamline payments, and service their customer bases. In response to the pandemic, the company quickly built the capabilities to allow schools and studios to build their digital presence and also offer remote learning solutions. Finli charges 2% on all transactions processed with premium options available for additional features.
LA TechWatch caught up with CEO and Founder Lori Shao to learn more about the critical service the platform provides to family businesses, the company’s future plans, and recent seed extension round, which brings the company’s total funding to $2.6M.
Who were your investors and how much did you raise?
We successfully raised a $1M seed extension led by MaC Venture Capital, bringing the current seed round to $2.5M. We’re grateful the partners at MaC believed in our vision of being the leading payment software solution for small businesses.
Additional seed round investors include TechStars Los Angeles, Core Innovation Capital, and Muse Capital.
Tell us about your product or service.
Finli is the only fintech startup dedicated to family-centric businesses in education and enrichment. With the goal of uplifting small businesses in communities across the country, Finli removes the administrative burden from small business owners by offering support with invoicing, scheduling and streamlining payments, and growing their customer base.
What inspired the start of Finli?
As a mother of two, I recognized the value neighborhood schools and studios brought to my family but noticed many of these small businesses were running on antiquated systems. As a fintech industry veteran, I decided to use my knowledge and experience to create Finli to lift the administrative burden off of small business owners so they could better serve their customers while worrying less about payments.
How is it different?
Finli is a SaaS platform with a heart. Finli stands out for being the only integrated payment software solution for small businesses in enrichment and education. With no monthly software fees and only collecting 2% of all tuition payments, Finli is the most affordable payment solution on the market and continues to be the leading choice for neighborhood schools and studios.
What market you are targeting and how big is it?
Finli targets small to medium-sized businesses around the world in education and enrichment. This is a $65B addressable market in the US alone.
What’s your business model?
Our SaaS model is 1-2% of transactions processed with an opportunity to provide paid premium features that help accelerate revenue growth for our customers.
How has COVID-19 impacted the business?
The COVID-19 has severely impacted the customers we support. When the “stay-at-home” order went into effect in March 2020, many of these businesses were forced to close their doors indefinitely. Our team had to act fast to create Finli Classes (formerly known as Stand Up For Small Business). Finli Classes is a free online platform small businesses in education and enrichment can use to set up their virtual shop and continue teaching their classes to a wide audience. In a matter of months, Finli Classes registered over 100 businesses across the country.
What are the biggest challenges that you faced while raising capital?
One of the biggest challenges as a minority, female startup founder was fundraising. I’ll never forget during one of my first meetings with a VC, a managing partner cut me off during my pitch to demand that I stop talking and proceeded to tell me how I should be presenting my company. This happened in a room full of mostly white, mostly male colleagues, so to say I was mortified is an understatement. I’m sure this never would have happened if I wasn’t a female founder.
The experience forced me to look within to find a sense of self and to find my voice. I realized that I was the expert for the problem I was trying to solve. I learned to not let people’s words or actions deter me from my mission to help small businesses and families who are far often overlooked in the fintech industry.
What factors about your business led your investors to write the check?
Providing any software to the SMB space is tough – expensive to acquire, long to convert, and attrition will always be an issue. Our investors believe in Finli’s vision but then again, many have built SMB software and failed. What sets us apart is our execution and distribution strategy. The market and need are obvious and they believe we have what it takes to pierce through the noise and truly make a difference.
What are the milestones you plan to achieve in the next six months?
We aim to onboard 200 new customers in the next six months and refine our customer acquisition strategy.
What advice can you offer companies in Los Angeles that do not have a fresh injection of capital in the bank?
- If you’re in the earliest product development stage, be scrappy and outsource your MVP to a trusted, cost-effective dev shop.
- Talk to as many prospective clients as possible and try to get them on a waitlist to demo
- Try to sign up a friendly private beta group of users to your MVP so you can get feedback – either you have the capital to enhance/iterate on your product now or document it into your product development roadmap
- If B2B, you can try to raise some capital with the early traction and should support your pitch with data to validate you are building a painkiller and not a vitamin. People out there need your product. You are a must-have, not a good-to-have.
Where do you see the company going now over the near term?
In the near term, we want to become the Shopify for SMBs in education. We want to be that one-stop-shop for our clients to take care of everything that is behind the scenes so they can focus on what they do best.
What is your favorite restaurant in LA?
There are so many good restaurants in LA and I’m always discovering new hole-in-the-wall restaurants, so my answer constantly changes. Right now, it has to be LaoXi Noodle House in Arcadia. They make really authentic Shangxi noodles from scratch. LaoXi is owned by a husband and wife team. The husband is the chef and the wife is the cashier and waitress. This is a tiny establishment with only 5 tables, but everything tastes so good. I’ve never seen them take a vacation and just like many family-owned restaurants, they are struggling during COVID. Give them a try next time you’re in the neighborhood and support small businesses. My favorite dishes are “Wife” noodles and lamb noodle soup with “cat ear” shaped noodles.
