B2B payments have scored again with venture capitalists.
Investors placed $27 million with B2B payments startup Behalf, reports said on Tuesday (Aug. 30). The Series C funding round was led by Viola Growth and saw participation from existing backers Sequoia Capital, Spark Capital, MissionOG and Vintage, reports said.
Behalf is focusing on increasing the use of credit in B2B payments, mainly dominated by check, cash-on-delivery or ACH.
"The low penetration of credit-based transactions and limited access to working capital significantly constrains business purchasing in the small business segment and inhibits economic growth," Behalf said in its announcement.
Behalf provides credit approvals at the point of sale for B2B transactions, providing funds to the supplier then collecting funds from the buyer on a payment schedule. Behalf's lines of credit can be used with any supplier chosen by buyers, the firm added, and repayment plans can be set on a customizable schedule.
"Behalf is targeting a fast-growing market of SMB payments and credit, valued by analysts in the trillions, that is underserved by banks," said Harel Beit-On, founder and general partner of Viola Growth. Beit-On will now join Behalf's board of directors. "Led by a strong founding and executive team, Behalf presents an impressive growth rate and high customer retention by disrupting the way small businesses purchase new goods and services from their vendors of choice with clear affordable terms."
In another statement, Behalf Cofounder and CEO Benjy Feinberg highlighted the gap in this type of financing offered to SMEs by their banks.
"[SMEs] are severely constrained by lack of access to working capital, and their financial needs are not a focus area for traditional banks," he said. "Behalf has a simple solution, driven by data and technology, that allows us to provide well-priced and flexible credit tools to help SMBs and their suppliers grow profitably."