The alternative lending sphere has fallen out of favor with venture capitalists, according to CNBC reports this week. BlueVine CEO Eyal Lifshitz told the publication that there has been a shift in how alt-lenders get financed, with backers now looking more closely at the “viability of the overall lending model.” Researchers found that online lenders are headed for a five-year low in venture capital levels.
This week, though, alternative lenders saw the most action from investors. One startup scored the largest funding round of the week ($45 million), while it’s also worth noting that both alternative SMB lenders that landed on this list are based in India. PYMNTS breaks down all of the funding rounds of the last week below.
With $45 million in fresh funding, Capital Float, based in India, said it is on a path to growth when it comes to small business lending. The Series C funding Capital Float announced this week comes from Ribbit Capital, based in Silicon Valley, as well as SAIF Partners, Sequoia India and Creation Investments, and adds to a $2.3-million funding round the firm revealed earlier this year.
KNAB Finance Advisors
Another Indian firm, KNAB Finance Advisors, raised about $400,000 in two different funding rounds, the small business lender revealed this week. NFBC InCred and several individual investors provided the funds, according to VCCircle. According to KNAB Finance cofounder Mandeep Chaudhary, most backers in the company are from financial institutions. The company landed approval to operate as a non-deposit-taking NBFC in October of last year, and began disbursing loans in January of this year. “After receiving our NBFC license, we held ourselves back for two months due to demonetization,” Chaudhary told the publication.
Small Business Finance
While not an alternative lending startup, Mirador does help banks and credit unions act more like alt-lenders with its small business lending platform for FIs. The company secured new funding from CMG Ventures, reports this week said, though backers didn't disclose how much was raised. Mirador did say it will use the funds to help traditional lenders provide efficient SMB lending solutions and improve the lender-borrower relationship.
Saudi Arabia’s PayTabs revealed $20 million in new funding to provide financial services to small- and medium-sized businesses, the company said this week. The company didn’t disclose who provided the funding, but it did say it would use the backing to expand internationally, aiming to enter at least 20 new markets over the next two years. PayTabs said it will pay particular attention to MENA, Southeast Asia, India, Africa and Europe, and will also use the funds to focus on product development and M&A. PayTabs provides payment solutions to companies to help them receive payments online.
With a focus on the automotive industry, Maihaoche provides an eCommerce platform for members in the space’s supply chain. This week the company secured $29 million in Series B funding led by Welight Venture Capital, founded by Wu Ziaoguang, former Tencent executive vice president. Northern Light Venture Capital and LB Investment also participated. The Chinese firm launched a supply chain finance company earlier this year and raised $20 million in Series A funding last October.
The Hive Project
U.K.-based The Hive Project attracted backers with its Ethereum- and cryptocurrency-based invoice financing platform for SMBs. The company announced $8.95 million in fresh funding via its token sale, with 2,234 investors around the world. The funds will be used to focus on development, marketing and implementation of its platform, according to reports, while some will be set aside for its liquidity pool.
Supply chain software company BluJay scored $500 million in the form of a financing facility from TPG Specialty Lending and BlueBay Asset Management’s Private Debt Group, the company said this week. The funds will be used to focus on expansion and accelerate growth, while $200 million will be used to finance acquisitions. In its announcement of the financing, BluJay said it has already completed acquisitions of LeanLogistics and Blackbay, added 269 customers in the last 18 months, and fully integrated its product portfolio.