By Aditya Soni
Dec 4 (Reuters) - Flex, an artificial intelligence startup that aims to be a one-stop shop for the financial needs of mid-sized business owners, said on Thursday it has raised $60 million in a Portage Ventures-led funding round.
The Series B round valued the firm at around $500 million, according to a person familiar with the deal. It takes Flex's total equity raise to $105 million.
The company said it is targeting "jumbo shrimps" — mid-sized profitable businesses earning between $2 million and $100 million a year — often overlooked by traditional fintech platforms and mainly served by regional banks.
Unlike AI startups looking to tackle specific tasks such as accounting or expense management, Flex aims to bundle private credit, business finance, personal finance and payment tools into a single solution.
"We have a very broad kind of product suite but an extremely narrow customer base," founder and CEO Zaid Rahman told Reuters, noting many medium-sized businesses lack large finance teams that handle such tasks at bigger enterprises.
"Our customer base are a few hundred thousand jumbo shrimp business owners. These business owners touch 40% of American payroll."
Despite a funding surge for AI startups, doubts remain about real-world adoption, with an MIT study earlier this year finding that only about 5% of AI projects advance beyond the pilot stage.
Flex is trying to minimize inaccuracies by ensuring AI outputs are checked by financial experts. Growing adoption of its tools - which include a business credit card - has helped it triple payments volume to $3 billion in 12 months.
The company is launching a new invite-only consumer card called Flex Elite that would compete with Amex Centurion, typically used by high-net-worth individuals.
It will use the new funds to accelerate product development and attract more clients by expanding its 80-member team.
(Reporting by Aditya Soni in Bengaluru; Editing by Sahal Muhammed)