Investors Balk At Talk Of Alt-SME Lending Collapse

The alternative small business lending market took home the biggest slice of cake this week with about $33.5 million worth of venture capital across two deals. That may not have been surprising this time last year, but today, considering talk of lackluster performance by these innovators — plus recent warnings over a total market collapse — that funding is pretty impressive.

But it was the big names from Google, Cisco and Hewlett-Packard that made for the week’s largest enterprise-focused venture capital round. Find out who made the deal and how the rest of the more than $81.5 million in investments was divvied up below.

SME Finance

EZBob

Earlier this week, Bibby Financial Services raised some eyebrows when Chief Executive David Postings told Financial Times that the alternative small business marketplace lending industry has all of the hallmarks of the personal finance market just ahead of the 2007–2008 financial crisis and that the industry will inevitably crash.

“There will be a crash sooner or later,” he warned the publication.

Some investors in the space might agree but not the backers of U.K. SME lender EZBob. The company announced late last week that it secured nearly $29 million in Series C funding from Leumi Partners and Oaktree Capital Management, according to reports.

EZBob operates the Everline and EZBob online small business lending platforms, and CEO Tomer Guriel said in a statement that the funding “is proof of our game-changing technology and unique approach to business lending.” The executive added that the support will fuel the firm’s expansion across the U.K.

StreetShares

The backers behind SME lender StreetShares don’t seem to agree with Bibby Financial Services, either. Backers at Fenway Summer, Endeavor Equity Holdings and Pivot Investments all participated in a $4.5 million Series A funding round for the company founded by CEO Mark Rockefeller, the firm said Tuesday (March 15).

A veteran himself, Rockefeller targets his lending services towards veterans that are interested in launching their own businesses. The StreetShares platform allows veterans to access working capital loans through its online marketplace and collaborates with other marketplace lending sites, reports said.

The Series A round is still open, so it remains to be seen whether more investors will jump onto the platform before it closes.

Payments

InstaRem 

With $5 million in new backing in hand, InstaRem is gaining some new popularity among the small business crowd for its cross-border payments solutions. The company, based in Singapore, was first launched to work with consumers and businesses in Australia, especially as they looked to send and receive funds with India.

Now, InstaRem operates across Canada and various markets in Asia, with plans to expand in the U.S. and Europe.

Investors at Vertex Ventures, Fullerton Financial Holdings and Global Founders Capital have aided in those expansion goals with the Series A funding round, announced on Wednesday (March 16). And while InstaRem said that it assumed it gained traction among SMEs for its lower cost of money transfers across borders, the company told reporters this week that its highest selling point with corporate users is the ability for a small business to wait until a payment is actually due to send money — instead of having to send it days or weeks in advance to make up for the lag time of traditional cross-border payment services.

Logistics

Cainiao

Digital commerce sites are beginning to embrace services for the back-end operations of the sellers of their platforms, and Alibaba, China’s largest eCommerce firm, is no exception. The company founded Cainiao, the logistics firm that helps businesses with an online sales base manage their shipments.

Alibaba, which founded the company three years ago, announced the latest funding round for the company. Cainiao did not disclose how much it secured — meaning the value of the corporation remains unknown — but it did reveal that it would be spending $15.4 billion over the next five to eight years in an effort to boost China’s national logistics network. Key to that effort, Alibaba has said, is to strengthen its Big Data capabilities.

Enterprise Security

Skyport Systems 

There were some big names behind the investment of enterprise security startup Skyport Systems, which closed a $30 million funding round, announced on Tuesday.

The company itself was started by former Hewlett-Packard executive Art Gilliland; reports said backers of the funding included Alphabet’s Google Ventures, Cisco Investments, Thomvest Ventures, Northgate Capital and InstantScale. Existing supporters include Index Ventures, Intel Capital and Sutter Hill Ventures.

The Series C funding will be used to help propel Skyport’s business model, which uses both hardware and software to safeguard the enterprise — a diversion from earlier consensus that the future of enterprise security was strictly in the cloud, said Google Ventures General Partner Dave Munichiello in an interview with Fortune.

Enterprise Insurance

Next Insurance

Also Tuesday, Next Insurance revealed a $13 million seed funding round by Zeev Ventures, TLV Partners and Ribbit Capital, as the startup looks to fill in the gap for small businesses that are turning to online channels to research and obtain business services like insurance.

According to Next Insurance, SME insurance providers generally service clients within brick-and-mortar establishments. Next Insurance offers a way for businesses to access insurance needs and services online; according to reports, the small business insurance market is worth about $100 billion in the U.S. Fresh with new funding, Next Insurance is readying its launch for mobile and desktop platforms, with plans to make its market debut this spring.