B2B Payments

B2B Investment Tracker, May 1-8

After last week’s gloomy investment numbers, May is off to a more flowery start for B2B startups. The biggest winners of the more than half a billion dollars worth of funding and acquisitions in the last seven days were SMEs, from the smallest of pre-seed startups to mid-market companies. Small business-focused alternative lenders, SaaS providers and financial solution solvers secured big bucks as the B2B market once again regained attention from venture capitalists.

B2B Startup Incubators

The week kicked off with reports over the weekend that startup incubator Acceleprise Ventures secured a new $3.5 million fund to invest in new startups. While the backer usually focuses on pre-seed B2B companies in general, this time, reports said the new fund will specifically eye enterprise-focused app developers.

Alternative Lenders

Late last week also kicked off multiple investments in the SME alternative finance industry. Germany-based peer-to-peer lending platform Lendico said it is readying to boost its small business lending operations thanks to a $22.5 million investment from several backers including Rocket Internet, Access Industries, and HV Holtzbrinck, reports said Friday (May 1). The funds will specifically be used to develop new lending technology, and strengthen Lendico’s long-term vision of SMEs no longer needing traditional financial institutions.

“We have won another experienced strategic partner,” Lendico CEO Dominik Steinkühler said in a translated statement. “Together we share the belief that in order to originate loans to consumers in businesses in the future banks are no longer needed.”

Days later, on Tuesday (May 5), GLI Finance was reported to have invested nearly $2 million in U.K.-based SME lending platform Funding Options, leading to a 28.9 percent stake in the company. According to reports, Funding Option recently applied as a “neutral platform” to the HM Treasury to take part in a government program requiring banks to refer small businesses rejected for a loan to alternative lenders. In a statement, Funding Options founder and CEO said that GLI’s backing will aid the company to become a “one-stop-shop” for SMEs to access financing.

SME Financial Services

In line with new investor backing of small business-focused lending, venture capitalists also pumped money into emerging financial services companies similarly gearing their solutions towards SMEs. Supply chain financing supplier The Credit Junction, for example, announced Wednesday (May 6) that it secured $50 million from Victory Park Capital to strengthen its services to small- and medium-sized businesses across the U.S. The investment, The Credit Junction revealed, provided the company with its first credit facility as well as financial backing to be used for working capital as it readies for an equity fundraising event later this year.

According to Victory Park Capital principal Tom Welch, supporting The Credit Junction was part of the asset management firm’s acknowledgement of the importance of SME finance. “Small businesses are a large segment of the marketplace that continues to be underserved by traditional banking institutions,” he said. “What excites us about partnering with The Credit Junction is the lack of competition and innovative financing alternatives within the SME ABL space along with its unique customer acquisition strategy.”

Chinese SMEs will gain a boost from Thursday’s news that B2B Internet technology sales servicer ChinaNet nabbed $3.5 million from Jinrun Technology, a deal that will allow ChinaNet to gain traction among the small business community and service their needs for spending oversight. The backing, ChinaNet said, has led to the implementation of an entirely new business revenue model. “In the same way that city governments use Jinrun Technology’s technology to monitor the costs of a public construction project and maintain a fair and transparent bidding and selection process, Chinese SME business owners can also utilize Jinrun Technology’s product and services,” ChinaNet Chief Operating Officer George Chu said. “SME business owners can monitor costs, increase the transparency of their business sourcing and purchasing process and find the best price to quality supply or service needed on an eCommerce platform through Internet or mobile.”

Also on Thursday, digital check solution provider MyECheck revealed that it has finalized the acquisition of cloud billing and payment platform developer Seergate, the companies reported. Seergate was founded in 2007 with an eye on small business payment services and omnichannel solutions. Today, the company offers a more robust array of payment services for both businesses and customers, but the acquisition of Seergate and its cloud technology adds to existing billing, invoicing and payment services for SMEs.

B2B SaaS, eCommerce and Big Data

For B2B companies – large or small – there were a slew of other investments over the last few days that strengthened businesses developing enterprise-focused Software-as-a-Service, digital commerce and Big Data solutions.

Not surprisingly, SaaS firms nabbed a major portion of the investments. Document services provider Pitney Bowes kicked off the week with news Tuesday (May 5) that it reached a deal to acquire cross-border commerce SaaS solutions provider Borderfree for about $395 million, the largest investment of the week. The takeover, Pitney Bowes said, is part of the firm’s plans to expand its offerings into digital commerce and SaaS to enter the cross-border commerce market. Borderfree provides retailers with fulfillment, customs and multicurrency pricing services – is a step in the right direction. The businesses said they plan to close the acquisition in the second quarter of this year.

The next day, SaaS firm Wrike revealed a $15 million Series B fundraising round on Wednesday (May 6), led by Scale Venture Partners, DCM Ventures and Bain Capital Ventures, reports said. The company offers work management software – an industry with a lot of competition, the company acknowledged, but one that is lacking in allowing companies to integrate their existing data into the platform. While its not yet in the same ranks as other tip rivals, Wrike actually told reporters that it did not necessarily need the latest backing, but couldn’t pass up on the opportunity – suggesting a strong cash flow for the firm for the future.

Thursday saw two new investments in the B2B eCommerce and Big Data spaces. The owner of India-based B2B eCommerce platform industrybuying.com, MTech Engineering, is reportedly readying to raise $15 million in Series A funding led by SAIF Partners, according to VC Circle. Reports said the firm, which raised $2 million last December, will use the backing to expand operations in India and enhance its technology for its product sourcing and shipping services. That same day, Big Data Partnership announced the conclusion of its second fundraising round, which led to $4.7 million in backing led by private equity firm Beringea, which also led the company’s Series A fundraising round. Big Data Partnership said it plans to use the funds for expanding its Big Data services in sales and marketing, data science and engineering in the midst of rising demand from business customers. The company offers Big Data training, storage and support for an array of industries.

It was a diverse week for B2B investments, but without a doubt, the small business-focused solutions innovators secured significant attention among venture capitalists. Altogether, investors pumped more than $511.2 into the B2B startup space through fundraising and acquisitions, a healthy boost from a disappointing lack of investment the week before.

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