B2B Payments

VCs Remain Loyal To Top Disruptors: Alt-Lending, Blockchain

Venture capital is all about funding disruptors and innovators. Perhaps that’s why the top dog in this week’s B2B venture capital roundup was the blockchain, an industry whose reputation for having the potential to overhaul the financial services sector as we know it remains preserved.

Blockchain startups secured more than $55 million this week, though we’re not exactly sure how much, considering some secret venture capital funding. Alternative lending startups also topped the list of VC investment volume, but investors remained tight-lipped here, too.

Overall, it seems venture capitalists still have faith in the disruptive powers of some of this age’s most talked about FinTech innovations — even if they won’t disclose exactly how much faith.




Over the weekend, alternative lending platform C2FO announced it has secured new funding from a big name. Citi Ventures, the venture capital unit of Citibank, provided an undisclosed amount of financing for the small business working capital marketplace, reports said Sunday (Jan. 31).

C2FO links businesses with accounts receivable financing by connecting them with other corporations that have cash to spare — and to lend. In a statement, Citi Ventures MD and Co-Head of Venture Investments Arvind Purushotham pointed to the company’s “rapid global growth” as proof C2FO supports stronger supply chains. The platform already has offices throughout the world, including in Germany, Hong Kong, Singapore and India.

The support from Citi Ventures follows last year’s $40 million investment in the company from multiple investors, including Temasek Holdings.



In Germany, reports surfaced on Tuesday (Feb. 2) that small business lender Spotcap secured an impressive $34.4 million thanks to Finstar Financial Group, based in Russia. Existing backer Holtzbrinck Investors also participated in the round, reports said.

With the new financing, Spotcap said it wants to enter into markets beyond the Australian, Spanish and Dutch ones it is currently in. In those new markets, it would offer its corporate FinServ operations to link companies to cash flow by using an in-house-developed credit scoring mechanism that integrates directly into a borrower’s accounting software and bank account.

In an interview with TechCrunch, Spotcap CEO Toby Triebel acknowledged that while markets like Spain may not be the most lucrative, eCommerce in these countries is still in growth phase, leaving significant room for businesses like Spotcap to grow and gain an early lead.




Paycards saw a bumpy road last year, with legal issues calling into question the ability for prepaid payroll cards to fairly serve the underbanked. The issue can be traced back to the fees associated with using a payroll card, which many underbanked employees rely upon to get paid by their employers.

This year, the industry seems to be off to a better start, and one startup is leading the way. Known as dopay, the company provides payroll card and financial services geared towards both underbanked employees and their employers. On Monday (Feb. 1), reports said dopay secured $2.4 million in venture capital led by Techstars Ventures and Force Over Mass Capital. The funding, the firm said, will be used to expand operations across the Middle East and Africa, with Egypt as its next target.

Dopay links companies with payroll cards to pay their employees, as well as cloud-based payroll tools for businesses and mobile account management solutions for workers.




Skuchain said Tuesday (Feb. 2) that it nabbed new financing from several backers investing in the company’s development of blockchain solutions for the B2B trade finance and supply chain finance spaces.

Investors Amino Capital, Digital Currency Group and Fenbushi Capital provided the undisclosed funding, money that will be used to help Skuchain develop its “commerce cloud” — a cloud-based platform where trade partners can interact and streamline the trade finance process.

While the exact amount of funds was not revealed by the company, Skuchain said in its announcement that it is working to nix paper and manual processing in the global trade finance market, one that is worth $18 trillion. Its solution, the firm added, wants to replace the cumbersome, slow process of letters of credit and factoring.



While Skuchain plans to target its solution towards a specific use case, another blockchain startup that secured financing this week has a more general target in mind. 

In what’s believed to be one of the largest funding rounds of its kind, Blockstream said Wednesday (Feb. 3) that it secured $55 million in Series A backing by several investors supporting the company’s efforts to utilize sidechain technology for real-world applications.

Sidechains is a blockchain protocol and platform and supports cross-chain functionality for bitcoin. Blockstream said its efforts have implications far beyond just FinTech and financial services. Participants in the Series A round included Horizons Ventures, AXA Strategic Ventures and Digital Garage, along with a slew of other existing supporters.




Another win for India’s eCommerce sector: Kartrocket secured $6 million in funding, spearheaded by Bertelsmann India Investments. While Kartrocket doesn’t operate in the B2B eCommerce space, it is a B2B company providing other SMEs with a toolkit to launch online sales operations. According to the company’s CEO and cofounder, Saahil Goel, the company wants to fill a gap in India’s market that, at present, doesn’t not support smaller businesses’ eCommerce efforts.

“The current ecosystem is not supportive of integrating smaller sellers into eCommerce,” he said in a statement on Monday (Feb. 1). “In fact, they aim towards replacing them rather than including them. By bringing such sellers online, we’re building the largest supply base of unique products for buyers to choose from.”

The exec added that the new financing will be used to further develop its product and expand its seller community.



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