It feels like 2014 again with the ongoing popularity of alternative lending startups. It’s even more surprising given that 2016 could be the year that regulation begins to really kick in for these lenders — in the U.S., that is.
Earlier this week, reports emerged that some alternative lending and industry professionals are beginning to heighten their anxieties about incoming regulation, particularly as some ponder whether the U.S. Treasury Department will recommend that some loans offered through these platforms be reclassified as consumers loans. That, experts say, would be a massive headache for these players.
Investors seem confident in the industry’s startups and their ability to provide adequate risk management and underwriting for their loans; VCs provided more than $11.5 million for alt-lenders this week.
But the biggest funding round wasn’t in alternative finance. Find out how the more than $26.5 million in B2B venture capital was divided among alt-finance, supplier payments and Big Data services startups this past week.
Invoice financing is in the midst of a boom, at least in the U.K., with the latest figures stating that the industry has lent $943 million in the nation to SMEs in just the first quarter of this year. Venture capitalists seem to be seizing the opportunity in this space, most recently with MarketInvoice, a startup that revealed on Monday (July 18) a $9.55 million funding round.
MCI Capital, based in Poland, led the financing via its MCI.TechVentures Fund, according to reports.
While announcing the new funding, MarketInvoice also revealed two new hires: Lisa Gervis, who formerly worked at Elevate Credit and American Express, is joining as chief marketing officer, while Rupert Thorp, who worked at Experian and Sky IQ, is signing on as director of sales, reports said.
Seed funding for U.S.-based ZipBooks will help the small business accounting startup strengthen the underwriting process for its SME finance operations, reports announced on Wednesday (July 20).
The firm revealed $2 million raised from Peak Ventures, Liquid 2 Ventures, Pelion Venture Partners and other backers. While ZipBooks offers SMEs a cloud-based accounting platform with a set of tools, including invoice management and card payment processing, the company also provides invoice financing for its users. It recently rolled out a mobile-friendly version of its invoice financing offering.
ZipBooks said it will focus on this aspect of the business with the new funds raised and plans to expand its staff as well.
LQD Business Finance
Chicago’s LQD Business Finance announced a Series A funding round on Thursday (July 21). It didn’t say how much it raised, but the firm did note that Fintech Ventures Fund led the financing, which will be used to help LQD accelerate growth and propel its expansion throughout the U.S.
In a statement, LQD CEO George Souri said that Fintech Ventures Fund’s focus on technology-based lending “gives the fund a unique insight into the space and makes them a valuable addition.”
“We have seen almost every business lending company out there and believe strongly that LQD — because of the larger loan market it’s targeting and the strength of its underwriting and risk management — is uniquely positioned to win in its targeted market,” said Fintech Ventures Fund General Partner Serguei Kouzmine.
Accounts Receivable Management
Australian startup ezyCollect is looking to help the nation nix its newfound reputation as taking the most time in the world to pay outstanding invoices. The company announced a nearly $1 million seed round on Thursday as it looks to provide small businesses with debt collection solutions and AR management.
The company provides automated follow-up emails, texts and dispute management for companies that are chasing down outstanding and late payments from their corporate customers.
Tank Stream Ventures led the funding round, reports said, which will be used to help ezyCollect focus on growth within Australia. The company is looking to target the root of the late payments problem, which is corporate payments culture, to help businesses get paid faster instead of forcing them to rely on what the firm’s founder, Arjun Singh, described as “band-aid solutions,” like alternative lending.
Bain Capital Ventures and Carmel Ventures led an impressive $14 million Series C funding round for U.S.-based Redis Labs, an act of support for the startup’s Big Data management services. Already, the company services major corporations, like TD Bank and Verizon, and announced Thursday — along with its latest funding — that it secured 600 new corporate clients in the first half of 2016.
“Now more than ever, enterprises need solutions that can quickly process large sets of data,” said Redis Labs CEO and Cofounder Ofer Bengal in a statement. “We founded Redis Labs with the mission of extending the power of Redis to enterprises who needed to simplify how they manage big and complex data.”
The executive added that corporations today are becoming more aware of the value of Big Data management; Bengal said the funding, which also saw investments from existing backers Silicon Valley Bank and Tamar Ventures’ Zohar Gilon, will be used to fuel its innovation efforts.