So he teamed up with and to build a platform that could help nonprofits manage this pain. The goal was to solve the problem of nonprofit money management at scale.

But then Alavi ran into another problem. Raising money to build , the startup heā€™d conceived of.

ā€œFundraising was brutal,ā€ he recalls. ā€œOver 70 VCs passed, and I stopped counting. Nobody wanted to hear about nonprofits, let alone nonprofit finance.ā€

But Alavi, who had worked at the San Francisco-based for over eight years, wasnā€™t ready to give up.

In mid-2024, Mazlo raised about $1.1 million from and to grow the San Francisco-based company.

Purpose-built fintech for nonprofits

Alavi and his team worked to build a finance platform that was designed specifically for the needs of nonprofits.

ā€œThere were companies out there handling bits and pieces, like basic spending accounts and the ability to accept payments for sorority fundraising,ā€ he said. But their aim with Mazlo was to build a fully compliance-driven solution, ā€œone that had all of the banking and finance tools a nonprofit organization would need.ā€

ā€œThe compliant piece was everything, because once you make an accounting or reporting error, it doesnā€™t matter how much youā€™re helping people, fail an audit and you risk losing your nonprofit designation and have to shut down,ā€ Alavi explained.

The startup launched in August 2024, and things were going well. But then Mazlo faced another problem. Money was running out.

But with about a month of runway left and nearly missing payroll, Alavi and team raised another $3.5 million in seed funding from , , and Social Good Fund, along with friends, family and advisers.

And now the company is emerging from stealth as it works with more than 60 organizations with over 1,600 users across nearly all 50 states.

For Alavi, the mission is deeply personal.

On his page, he wrote: ā€œI’ve witnessed something that shouldn’t exist: angels and heroes performing miracles with financial infrastructure from the 90s.

ā€œBrilliant organizations feeding our hungry, housing our homeless, and fighting for our rights – forced to navigate broken systems held together by spreadsheets, emails, and hope. It’s not just inefficient. It’s immoral. That’s why I co-founded Mazlo, the first truly purpose-built financial infrastructure for nonprofits.ā€

Business model

Mazloā€™s core features center around making it easier for nonprofits to raise money and designate funds. It offers ā€” through a banking partner ā€” bespoke checking accounts built for the ā€œunique needsā€ of nonprofits; accounting tools with what it describes as ā€œeasy to use transaction coding,ā€ and smart cards designed to keep spending transparent and controlled.

Since the startupā€™s first onboarding in August 2024, gross profit has grown nearly 4x, up 275% in 12 months, according to Alavi. Itā€™s had zero churn to date.

Mazlo is currently focused on nonprofits that provide services to communities.

ā€œA very interesting sweet spot for us has been fiscal sponsors ā€” nonprofit organizations that provide fiduciary oversight, financial management and other administrative services to help build out charitable projects,ā€ Alavi told °µĶų³Ō¹Ļ News. ā€œFiscal sponsorship is a and transformational part of the nonprofit sector that often flies under the radar.ā€

The 11-person company is also now being pulled into the funding side of the market, which includes foundations and grantmakers.

Mazlo makes money in a few ways. It earns interest on funds that are held in nonprofit accounts, a percentage of interchange fees from card spend, and a percentage of interchange fees from donations processed. It also earns money via a SaaS business model, charging a flat fee per bank account for accessing its software platform.

Investor POV

, co-founder of Super{set}, said that besides being impressed with Alaviā€™s firsthand experience with nonprofits, he could also see a ā€œvastā€ market opportunity.

Via email, he wrote: ā€œ$500 billion is sloshing around the balance sheets of these nonprofits.ā€

Chavez acknowledged that many investors have ignored the nonprofit center ā€œbecause the word ā€˜nonprofitā€™ naturally scares them away.ā€

ā€œWhat that misses is that there are hundreds of billions of dollars on the balance sheets of entities that literally cry out for a smarter, stronger solution than the patchwork of onesie-twosies they’re currently using,ā€ he added.

, partner at Westbound Equity Partners, noted that his firm believes that overlooked markets are where the biggest opportunities live.

ā€œNonprofits manage trillions in revenue but have been left behind by fintech,ā€ he wrote via email. ā€œMazlo can set the standard for this sector via efficiency, accountability, and new revenue tools through AI.ā€

Mendy agrees with Chavez that tech companies and investors alike have historically ignored the nonprofit sector because ā€œitā€™s often seen as too fragmented or not lucrative enough.ā€

ā€œThis is pretty shortsighted given that nonprofits drive $3.7 trillion in annual revenue,ā€ he said.

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