In an article posted on TechCrunch last weekend, Scott Maxwell, a seasoned venture capitalist, mused about the current path on which technology investment is traveling.
“While tech investment and VC activity climbed to its highest levels since 2000 last year, there’s a growing sentiment that we’ve reached a precipice,” he wrote.
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But Maxwell, who has been at VC heavyweight Insight Venture Partners and then started OpenView Venture Partners, says that the market isn’t headed towards another bubble burst.
“Instead, what we’re experiencing now is more indicative of the market’s tolerance for higher-risk investments given those investments’ performance and other economic factors,” he said. “For many, that trend is a harbinger for disaster. But in my book, it could be a good thing for the tech and VC industries as a whole.”
We’re moving towards a period in which venture capital issued may be leaner but is of more value, he argues.
The B2B startup space is probably hoping that’s true. This week, there were just three investments in the industry, two of which received less than $10 million from venture capitalists.
But a closer look at each of these funding rounds reveals startups that have their eyes on broad horizons. Each is using their technological edge to change the game of their respective industries, from small business banking to Big Data analytics.
Bringing Tech To Banks
It’s not a direct lender; instead, Mirador calls itself a Lending-as-a-Service provider, providing lenders with the technology they need to reach SME borrowers. The company revealed Monday (Nov. 30) that it secured $7 million in Series A funding through a round spearheaded by Core Innovation Capital. Other backers included Nyca Partners, Jump Capital and repeat investors Collaborative Fund, Wicklow Capital and Crosslink Capital.
At the announcement, Core Innovation Managing Partner Kathleen Utecht highlighted Mirador’s competitive edge. “Banks enjoy important relationships with small business customers and are stable sources of lendable capital, but they frequently lack the tools to profitably offer small commercial loans,” she explained, adding that Mirador provides a more cost-efficient way to serve small business borrowers.
Mirador said it will use the funding to pursue more relationships with financial institutions.
Creating A Tech-Savvy Bank From Scratch
Mirador may be looking to work with traditional FIs, but one company is looking to overhaul the small business banking game altogether by becoming a bank itself.
Also on Monday, Australia’s newest bank revealed its own venture capital to the tune of $72 million (A$100 million). Tyro Payments is currently a payments processor for small and medium-sized businesses. But earlier this year, the FinTech company received a banking license, making the firm the nation’s first FinTech firm to receive one, according to Chief Executive Jost Stollman.
Now, with fresh funding on the books, Stollman told reporters that Tyro will pursue SME lending and other small business banking services.
“SMEs are essential to productivity growth and job creation in our economy,” he said. “We want to build a new banking ecosystem that allows SMEs in whatever business — be it retail shops, pharmacies, medical practices, restaurants, pubs or hotels — to compete better.”
He added that as a FinTech company, Tyro already has a leg-up over traditional financial institutions weighed down by legacy services and tools. Investors seem to agree, with Mike Canon-Brookes (Atlassian cofounder), Tiger Global Management and TDM Asset Management participating in the funding.
On Wednesday (Dec. 2), BrightFunnel revealed a $6 million fundraising round as investors showed support for its use of Big Data in B2B marketing. The company’s Series A funding was led by Crosslink Capital, and Salesforce Ventures, Bloomberg Beta, Karlin Ventures and Resolute Ventures also participated, according to a company announcement.
It’s the technology-driven data analytics component of BrightFunnel that provides B2B marketers with more muscle, according to Cloudera VP of Marketing Alan Saldich, who said in a statement how BrightFunnel impacted his business.
“BrightFunnel, which is built on top of technologies like Impala and Hadoop, makes advanced marketing analytics easy and accessible to our entire marketing team,” he said.
Other clients include InsideView and Leadspace, reports said. BrightFunnel said it will use the funds to continue building robust, data-driven forecasting and analysis platforms for B2B marketers to understand the financial impact of their efforts.
More Funding On The Way
This week, $85 million reached three B2B startups looking to change the game. It wasn’t the most funding we’ve seen, but if VC guru Scott Maxwell is correct, it’s not necessarily the volume or value of these funding rounds, it’s the quality of the investment going towards solid startups.
And looking ahead, new funding is on the way. India-based venture capital firm Zone Startups, a network of investors focusing on providing seed capital, revealed that it raised $28 million that will be pumped back into between 15 and 20 companies over the next year. The focus of these investments, reports said on Thursday (Dec. 3), will be on B2B startups and connecting them to North American markets, as well as resources like work space and business development support.