Middesk Raises 57 Million Dollars to Automate Business Verification and Underwriting Processes

In a significant development for the fintech sector, Middesk, a platform designed to automate business verification and underwriting decisions, has announced that it has raised $57 million in a Series B round co-led by Insight Partners and Canapi Ventures. The funding round also saw participation from notable venture capital firms such as Sequoia, Accel, and Gaingels.

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Tripling Headcount and Expanding Product Suite

With the new capital infusion, Middesk aims to triple its headcount to 120 employees by 2023 and further develop products in the identity management space. According to Kyle Mack, Co-founder and CEO of Middesk, the fresh funds will enable the company to accelerate its growth trajectory and expand its product offerings.

Understanding Identity

When people think of "identity," they often associate it with "identity verification." However, as Mack explained in an email interview with TechCrunch, identity means something different based on who is asking or interested. For a bank, it may mean simplifying the process of opening commercial bank accounts. For a lender, it could mean accelerating the process for businesses to access capital. For the government, it might involve ensuring businesses are registered and paying their taxes appropriately.

The Problem of Manual Onboarding

Mack co-launched Middesk in 2019 with Kurt Ruppel to address what he describes as the "downstream effects and resulting challenges of onboarding new business customers." When entrepreneurs start a business, they need access to financial products like bank accounts and credit cards within weeks of formation. However, businesses don’t have the same infrastructure as individuals do, making it difficult for them to access these essential services.

Middesk’s Solution

Middesk aims to build the infrastructure that enables instant identity-related decisions between all businesses and counterparties. By automating business verification and underwriting processes, Middesk seeks to make it easier for businesses to access critical products and services like bank accounts, working capital, and corporate credit.

Impact of Market Downturn

The recent market downturn has exacerbated the problem of new and small businesses being unable to access essential financial products. As Mack noted, this results in a disproportionate amount of new and small businesses being unable to access critical products and services when they need them most.

Middesk’s Goal

Middesk’s goal is to build the infrastructure that enables instant identity-related decisions between all businesses and counterparties. By achieving this vision, Middesk hopes to make it easier for businesses to access financial products and services, promoting economic growth and development.