Oxygen, a startup that is bringing digital banking services to freelancers and micro- and small-sized businesses, is in talks to raise a new round at a valuation of over $500 million, two sources familiar with the matter told me.
The San Francisco-headquartered firm is in advanced stages of talks to raise about $70 million, the sources said. London-based Tribe Ventures is in talks to lead Oxygen’s Series B round, the sources added, requesting anonymity because the details are private.
Banks in the U.S. — and elsewhere — have traditionally refused to serve individuals without a traditional job and a consistent salary flow.
Hussein Ahmed, who previously worked at Amazon, faced this issue himself when he started to work as a freelance consultant for other startups. “That’s when I stumbled upon the market segment we are serving today,” he said in a podcast last year. Ahmed was working from a WeWork and realized that “everyone around me, from photographers to real estate brokers to accountants, were facing the same problem.”
It was then when Ahmed started Oxygen. The startup offers consumers and small businesses accounts at zero monthly fee. These accounts, which are FDIC insured, can be operated without a minimum balance and come with a Visa debit card.
The startup, which counts Y Combinator and Runa Capital among its backers, has amassed over 600,000 customers.
Oxygen declined to comment on the fundraise talks, but through a spokesperson Ahmed said the startup has seen a “massive growth in 2021,” and increased its revenue by 10 times this year. “We are having continuous conversations about how to best fund our future plans and will comment when we can.”