B2B Payments

Funding To Protect Business, And Funding To Grow It

Venture capitalists this past week mainly focused their funding on B2B startups in two categories: those that help companies protect their business, and those that help companies expand their business’ bank accounts. Many of the businesses that secured funding are Software-as-a-Service providers, but the firms all play a part in an array of B2B business procedures, from working capital access to T&E. A total of $218 million landed in the hands of these businesses, and we break down what funds ended up where.

Protect The Business

Data protection can come in many forms in the world of B2B. This past week, two startups nabbed funding for their models of corporate protection: cyber business intelligence and data storage.

Corporate cyber intelligence and protection firm IntSights announced a $1.8 million investment in the company by SaaS-focused venture capitalists at Glilot Capital Partners. The funding, announced Tuesday (Oct. 13), will support IntSights’ automated intelligence gathering and Big Data aggregation service.

“Our customers benefit from cyber intelligence that is unsurpassed in both quality and quantity, and in near real time,” said IntSights CEO Guy Nizan in a statement, “making it invaluable in discovering cyber attacks before they even happen.”

A key focus for IntSights? The notorious business invoice scam, in which a cyber thief hacks into a corporate email and fakes a supplier invoice demanding payment.

Soon after, the document and data storage and protection services of cloud-based SaaS firm Sonian secured a $7.5 million investment round for the company, led by Ares Capital Corporation, reports said Thursday (Oct. 15). More than 20,000 corporations use the tool, both B2B and B2C firms, the company said. “We’re seeing dramatic need for line-of-business big data visibility within the enterprise,” the company’s CEO Tim McKinnon said in a statement. 

Boost The Business

Unsurprisingly, most of the venture capital this week was distributed to companies that want to help other businesses secure new clients, find new money and make business processes more efficient all in the name of company growth.

SteelBrick uses its software to help businesses provide quotes for their corporate clients, and after recently adding a streamlined billing service to its offering, the company announced a $48 million Series C funding round Tuesday (Oct. 13). The investment was led by Institutional Venture Partners, reports said, along with other high-profile VCs like Salesforce Ventures. The investment brings the total volume of funds raised for SteelBrick to $77 million in the last year-and-a-half, giving the firm a robust foundation to help other companies strike new corporate partners, and get paid by them, too.

What’s a VC roundup without an appearance from an alternative lender? Alt-lending platform Kabbage secured its fifth round of funding to the tune of $135 million, led by Reverence Capital Partners with participation from others, reports said Wednesday (Oct. 14).

It was a Series E round that saw action from several investors including the investment arms of traditional banks like Santander InnoVentures, Scotiabank and ING. Plus, new supporters emerged, including Japan’s Recruit Strategic Partners and China’s Yuan Capital.

The backing means Kabbage has now raised more than $240 million, reports said, and allows the platform to expand its credit facility to more than $900 million.

“Lending is changing rapidly, with small businesses and consumers demanding a simpler and more customized experience,” said Reverence Capital Partners Managing Partner Milton Berlinski in a statement announcing the funding. “While Kabbage’s growth is remarkable, we are more impressed with Kabbage’s ability to scale while economically acquiring customers, decreasing risk and gaining significant operating efficiency.”

Helping businesses grow can be a matter of providing a way to streamline financial operations. TechCrunch reported this week on an investment round for Xpenditure, which secured $5.7 million in Series A funding to support its efforts to kill the expense sheet with its expense management platform.

“In our mission, it says clearly that we want to kill the monthly expense report,” the company’s co-founder and CEO Boris Bogaert told the publication. “It’s such a terrible waste of time and effort, and it needs to die. It’s sad to see that some software companies take this broken process and go through enormous lengths to recreate all this waste of effort – only now in digital form.”

Instead, Xpenditure says it handles the expense report process by automating receipt data capture in its cloud-based expense management software, according to reports, with reports being generated through its app.

A series of private investors spearheaded the investments, reports said.

Some B2B startups want to bring businesses more money through loans. Others want to help businesses secure their own funds by boosting sales. Thrive Capital hit the wires yesterday (Thursday, Oct. 15) when it revealed it led the $20 million Series B funding round for Kinnek, an online marketplace platform to connect small businesses with suppliers and manage procurement. The investment places confidence in Kinnek’s business model, which allows SMEs to use the platform for free, and charges a fee for suppliers to gain visibility on the marketplace.

According to separate reports in TechCrunch, Kinnek says it estimates that U.S. SMEs with annual spend of $20 million spend about $2.2 trillion every year on procuring goods, machinery and equipment. While reports said the statistics cannot be verified, Kinnek is seeking a piece of that massive spending. Already, according to reports, the platform works with 2,000 suppliers and has 20,000 SMEs on the site.

In a recent interview with the publication, Kinnek co-founder Karthik Sridharan said the platform is beneficial to both corporate buyers and suppliers by building supplier reputations while mitigating supplier risk for buyers. “In the [B2B] world, there’s nothing like a Yelp to help you understand the reputation of a particular factor,” Sridharan said. That’s where Kinnek wants to come in.

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