Startup DueCourse announced an $8.14 million seed funding round in support of its cloud-based invoice financing solution for SMEs, reports said on Monday (Sept. 19).
Rocket Internet venture unit GFC, Zoopla Founder and CEO Alex Chesterman and Lovefilm Cofounder Simon Franks provided the funding, which is made up of a combination of both equity and debt, reports said.
TechCrunch noted that DueCourse's acceptance of debt financing reflects the startup's business model.The company itself provides invoice financing to SMEs on its platform; it doesn't act as a third party to connect business borrowers to investors.
"We allow small businesses using cloud accounting the ability to access the money tied up in their unpaid invoices whenever they like, in just a few clicks," said the U.K. firm's CEO and cofounder, Paul Haydock.
DueCourse is built on its own risk mitigation technology. The company aggregates data from cloud-based accounting solutions used by its SME borrowers, like Xero and Sage, reports said.
"The rise of cloud accounting within the SME market over the past few years has enabled us to access real-time accounting information, which we combine with other external sources of data to generate a proprietary risk score for lending to small businesses," Haydock explained to the publication. Its risk model decides whether an SME is eligible to receive invoice financing, as well as the cost of that loan.
The publication added that DueCourse is looking to raise new Series A funding in the next few months and will be seeking up to $19.5 million.
Investors have supported other invoice financing startups this year, including MarketInvoice, which raised $9.5 million in July. Meanwhile, earlier this month, invoice financing company Fundflow announced that it would be expanding its solution to the EU market through a partnership with Wirecard.