Last week, PYMNTS reported on one of the year’s busiest days for B2B investment with more than $130 million of funding entering in the space. The last few days, however, have blown those numbers out of the water.
In all, innovators in the B2B sector saw nearly half a billion dollars of angel investments, venture capital funding and acquisition deals, making 2015 Q2 a wildly exciting time for B2B startups.
Europe, Asia and the U.S. saw the majority of the action, with the U.K. and India making the biggest investment splashes this past week.
Europe saw a massive influx of funding in the alternative lending space this past week, which is unsurprising considering the ongoing political efforts to facilitate cross-border crowdfunding and small businesses’ struggle to combat late payments across the region.
The biggest investment from venture capitalists of the week came in the form of $150 million raised for the high-profile P2P lender Funding Circle, a major boost to the company that said it wants to become the U.K.’s largest small business lender. Among new financial supporters of the platform include DST Global, BlackRock and Singapore-based Temasek.
The massive funding, announced Thursday (April 23), signals renewed support for a lender that has already issued more than $1 billion worth of financing to thousands of businesses in both the U.K. and U.S. According to Funding Circle Chief Executive Samir Desai, the new funds will likely be used to propel the firm into other jurisdictions. “We’ll be exploring more markets to take our business model to,” Desai recently told Reuters. “We think it works better as a global business.” Part of that expansion, he added, could come in the form of strategic acquisitions in the near future.
That same day, U.K.-based online lender ezbob announced more than $45 million in financial backing, led by fund manager Oaktree, according to reports, just two months after the firm combine with business lender Everline to strengthen its digital lending efforts. The companies have so far facilitated 6,000 loans to SMEs, and with the latest investment in the firms, that figure is only expected to rise.
Everline and ezbob Chief Operating Officer Russell Gould recently spoke with MPD CEO Karen Webster about the firms’ growth in the U.K. market, which is seeing a vast financial overhaul for small business lending.
The U.K. market has experienced a number of factors that contributed to the rise of alternative finance, Gould told PYMNTS. Among them are the financial crisis, of course, but also what he describes as the use of “archaic systems and processes.”
“We all recognized the huge opportunity to disrupt there,” he said. “Their processes take anywhere from 4-8 weeks, and we’re now doing it in less than 60 minutes. And we think that’s too slow, so the opportunity [to improve] is still there.”
Thursday revealed yet another multimillion dollar investment in a U.K. small business lender. Backers pumped $18.8 million into Praetura Asset Finance is likely to propel the lender’s existing progress in the space, reports said. The company has already facilitated nearly $38 million worth of SME loans after its first year in trading, thanks in part to what Praetura managing director Mike Hartley described as an “all-time high” for SME asset finance.
Germany saw its share of alternative lending investment when peer-to-peer digital lending platform Smava announced Wednesday (April 22) that it secured $16 million in backing, led by Phenomen Ventures. Other supporters included U.S.-based P2P lending marketplace Prosper, according to reports.
“This fresh capital enables us to accelerate our business growth as well as to fulfill our version of offering full-automated loans to borrows at the best rates in the near future,” Smava CEO Alexander Artope said in a statement. “The funding will also be used to advance Smava’s scoring technology, hire the best talent and further fuel growth.” Among the platform’s strongest selling points is its algorithm that helps establish the lowest interest rate for borrowers; Smava said it has facilitated $600 million in loans and saw 100 percent growth in lending volume over the last year
Reports said that the latest fundraising brings Smava’s total backing to nearly $30 million. Germany is Europe’s third-largest alternative finance market, according to 2014 data.
Investment throughout Asia saw most of its B2B-focused funding supporting B2B Software-as-a-Service startups for a range of tools. Customer service software provider Freshdesk, for example, announced Monday (April 20) that it nabbed $50 million in backing led by Tiger Global, Google Capital and Accel Partners, reports said. As a firm that aims to provide facilitated customer service tools to other businesses, Freshdesk will reportedly gain an edge on its two largest rivals, Zendesk and Salesforce. The Series E funding will be used to scale its software offering to reach a broader market, and brings the total amount of backing in the firm to $94 million. Freshdesk may technically be an India-based company, but it holds offices throughout the globe in the U.S., the U.K. and Australia – earlier this month the firm secured about 2,000 new customers in Australia, in fact.
TradeGecko’s inventory management software got some attention, too. As PYMNTS reported earlier this week, the Singapore-based firm secured $6.5 million in financial backing for its product that serves, in the words of TradeGecko CEO Cameron Priest, an “unsexy” industry of inventory management. The Series A funding, announced last Tuesday (April 21) and headed by NSI Ventures and Jungle Ventures, will help evolve TradeGecko’s B2B SaaS for managing stock, an especially complex market considering today’s omnichannel wholesale market.
On Thursday, happay raised $500,000 for its B2B SaaS, which offers expense management solutions. The funding came in the form of angel investment led by venture capitalist AngelPrime. India-based happay and its parent company VA Tech Ventures revealed that the backing will aid product development as well as the expansion of its staff. Earlier this year the firm announced plans to partner with RBL Bank to launch a new business-focused credit card, the happay Business Expense VISA Card, which offers spend tracking solutions as well as a mobile app for real-time employee spending insight.
B2B funding in the U.S. was a bit less industry-focused than in other regions of the world in the last few days, but the nation saw the largest investment of the week. Payments processing provider New Media Insight Group revealed in a filing with the Securities and Exchange Commission Wednesday (April 22) that it has secured private equity of $2 million by Premier Venture Partners, LLC. The backing, the firm said, will be used to strengthen its mobile payment and loyalty service tools, including mPAAY, CloudPay and other business-focused tools.
“This funding allows us to pursue opportunities that we have been arranging over the past year and to further execute our plans to bringing secure mobile payments, gifting and loyalty to merchants in the USA,” said New Media Insight’s CEO Michael Palethorpe. “The mobile payment industry is particularly vibrant, and the timing of this investment could not have been better. It propels us forward at a critical time bringing seamless and secure mobile solutions to business owners.”
The next day, B2B SaaS firm Bronto Software revealed that it reached an agreement to sell itself to technology conglomerate NetSuite in a $200 million deal. According to a press release, the companies plan to merge NetSuite’s omnichannel and cloud-based software services with Bronto’s cloud-based commerce SaaS provider.
“Just as customers demand seamless cross-channel shopping experiences, they increasingly expect companies to communicate consistently through all of their digital experiences – on site, at stores, in email or through social or mobile,” NetSuite CEO Zach Nelson said in a statement. The deal is expected to close in the second quarter of this year.
The merger resulted in the largest B2B investment of the week, followed closely by the $150 million in venture capital funding seen by Funding Circle. Altogether, B2B companies saw about $487 million in financial backing, making this quarter, just weeks old, an incredibly lucrative time so far.
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