B2B Payments

AltFin Leads Funding, But Up-And-Coming SMB Tech Is Close Behind

Once again, the world’s alternative SMB lending industry regained the spotlight, with key deals in Asia and South America placing the industry in the top spot for this week’s B2B FinTech roundup. But a key B2B industry came in a very close second thanks to a European startup, and it’s a segment of the market recently identified by the European Commission as an up-and-coming part of the financial startup community that is sure to make waves. Find out who scored how much of the more than $75 million that made its way to B2B startups this week.


Alternative Lending


Based in Malaysia, CapitalBay helps corporate buyers and small- and medium-sized suppliers access supply chain financing. This week, the company secured $477,000 from venture capitalists at KK Fund, based in Singapore. According to CapitalBay CEO and Co-Founder Ang Xing Xian, despite increasing interest in providing trade finance solutions to SMBs in the nation, there still exists a gap in available credit, with SMB suppliers forced to wait 50 percent longer to see their invoices paid compared to three years ago. The company did not confirm its exact plans for the new funding.


Power2SME, based in India, has topped off its investment with a $36 million Series E round, news reports this week said. Existing backers Inventus Capital Partners, Accel, Kalaari Capital, Nandan Nilekani and the World Bank Group’s International Finance Corporation all participated. The Series E round was announced just weeks after Power2SME, which facilitates B2B trade finance and offers SMBs a working capital solution, said the IFC provided $10 million for the company in an effort to address the working capital gap for smaller businesses in India.


For its initial investment round, Sempli, based in Colombia, scored $3.6 million, a show of support for its small business funding platform. The company secured the investment from FOMIN, Velum Ventures, XTP1, Grupo Generaciones and Dutch Good Growth Fund, along with private investors from Colombia and Europe. The company can provide working capital loans for small- and medium-sized businesses (SMBs) across Latin America as part of an effort to fill in funding gaps left by traditional lenders in the region. According to Co-Founder Felipe Llano, only about 40 percent of SMBs land a traditional bank loan. Sempli can not only fill in the gap, he said, but provide funding within 72 hours. The company said it hopes to complete a second funding round in the next two years.


Artificial Intelligence


Sweden-based payment terminal company wants small- and medium-sized businesses to wield the power of artificial intelligence (AI). This week, investors at the European Investment Bank (EIB) agreed, providing $35.8 million in funding for the company. With the funds, iZettle said it will continue to focus on research and development over the next three years, using AI and machine learning technologies to benefit SMBs. It’s part of a bigger effort, iZettle said, of helping small businesses gain access to the sophisticated technologies that are generally reserved for larger corporates. The investment will also be used to focus on development of new payment methods and infrastructure, digitization of commerce solutions and scaling of legislative and compliance systems, reports said.


Honorable Mentions

Blue Lotus Capital

This asset management company announced a new fund worth $15 million, which it will use to focus on investing in small- and medium-sized enterprises in India. According to Blue Lotus, it is the first SMB-focused private investment in public enterprise (PPE) fund, with plans to invest between $2 million and $5 million in small businesses. The $15 million fund was raised from multiple family offices in India.


Another one of India’s alternative lenders, OfBusiness, is planning to raise up to $25 million in fresh funding, according to an interview the company did with BW Disrupt this week. The company provides SMB financing as well as a product fulfillment platform for its business customers, enabling companies to access a credit line and procure raw material for their companies at the same time.


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