Toronto-based business banking startup Venn on Wednesday launched a high-interest feature for its Canadian and U.S.-dollar business operating accounts, aiming to boost yields at a time when most Canadian checking accounts earn just 0.01% to 0.05%.

“Businesses saw how high interest rates were, but only experienced those rates when taking out debt and never for their own balances,” said Venn Co-Founder Ahmed Shafik. “You’d see companies sitting hundreds of thousands, or even millions, in operating accounts just because there was nowhere better to put it.”

With more than 5,000 customers, Venn plays in a similar category to U.S-based business banking and expense management fintechs like Brex, Ramp, Rho and Mercury. Founded in 2021 and launched publicly in 2023, Venn began as a multi-currency account platform and has since expanded to offer corporate cards, invoicing, expense management tools, and accounting integrations.

Canadian businesses have long faced entrenched barriers in the traditional banking system, including near-zero interest on deposits, high wire and foreign exchange fees, strict lending requirements, and outdated tools that lag behind what U.S. fintechs offer.

With high-interest accounts that offer a 2% yield, Venn aims to offer more flexibility than high-yield vehicles such as guaranteed investment certificates, the Canadian equivalent of certificates of deposit. The offering could “return thousands of dollars annually to the average business,” said Shafik. 

Venn isn’t the only fintech aiming to challenge the stranglehold of Canada’s “Big Six” banks — RBC, TD, BMO, Scotiabank, CIBC and National Bank — with companies like Neo Financial and Wealthsimple offering high-yield products on the consumer side, and Float targeting business users with cash management tools.

With the high-yield business account, Venn “solves a real gap for Canadian businesses who haven’t had a place to earn on their operating balances without losing access,” said Dan Ahrens, co-founder and managing partner at Left Lane Capital, an investor in the company. Venn raised $21.5 million in Series A funding earlier this year, led by Left Lane with participation from XYZ Venture Capital, Intact Ventures and Gradient Ventures.

Working toward a full-stack banking and expense platform for businesses

Venn has two priorities as it expands its offerings: deepening its product suite to serve a broader range of business customers, and exploring new verticals such as credit and payroll.

“We went pretty broad for the SMB segment, and as you move to mid market and enterprise, the feature set needs to go a lot deeper to service more complicated use cases,” said Shafik. “There’s different use cases that companies are still using other fintechs or platforms for. How can we solve that as well to gain both the relationship but also actually make it 10 times better and 10 times cheaper?”

Venn works with multiple regulated financial institutions to power its products, including a recent partnership with Bank of Montreal.