Small business accounting and cash management took home the gold this week, with two startups raising a collective $93 million in funding. But the streak of B2B FinTech investments continues for startups of several industries, including cybersecurity, alternative finance and more. In total, businesses secured more than $145 million in venture capital (VC) across the U.S., U.K., Canada and India. We break down all of the deals you need to know below.
FreshBooks CEO Mike McDerment spoke with PYMNTS to announce the $43 million in new venture capital for his SME accounting company. Based in Canada, FreshBooks said it will use the Series B funding to continue to focus on growth; Georgian Partners led the round, while Accomplice and Oak Investment Partners also participated, the company said. According to McDerment, the funding reflects investors’ recent uptick in interest for accounting technologies for the self-employed.
“Compared to consumer and enterprise, relatively less investment has been made in this market. But what’s happening now, thanks in part to the internet and some evolution in the workforce, there are more people working for themselves and starting businesses,” the CEO said. “Investors are recognizing that this is a huge market breaking out. They’re really doubling down to help further that growth.”
In the biggest funding round on our board this week, Receipt Bank, based in the U.K., revealed $50 million in Series B VC funding led by Insight Venture Partners — marking one of the largest FinTech venture capital deals since Brexit, reports said. The company provides accounting and bookkeeping services to small businesses and claims to be the first to have automated information processing when SMEs upload receipt and invoice images. Other features include artificial intelligence-based offerings, with companies able to send their customers push notifications on mobile devices to remind them to pay their bills. With the new funding, Receipt Bank said it would hire 40 new members to its staff, as well as continue to build out its underlying technology to connect to more accounting and bookkeeping professionals and their own small business customers.
U.S.-based Karmic has raised $17.2 million in Series B funding to provide payment and expense management technologies to large enterprises, SMEs, banks and payment companies. The firm provides services that manage spend via a payment and cash management tool built into its mobile application. Linked into its offering are payment card capabilities that can give businesses greater, real-time visibility into spend. In addition to the new funding, Karmic announced news that it has added two new executives to its board of directors, Wei Hopeman, managing partner at Arbor Ventures, and Jim Whims, partner at Alsop Louie.
Based in India, Vayana wants to take advantage of the nations’ GST tax reform. With $4 million in Series A funding announced this week, the trade finance platform said it is looking to perpetuate the focus on digital invoicing and rising demand for trade-based financing in the country as SMEs adhere to new tax rules. Reports said IDG Ventures India and Jungle Ventures led the round, while Reliance Industrial Investments and Holdings also participated, among others. Vayana links SME suppliers to investors that can finance their outstanding invoices, while the firm has also struck a partnership with Mastercard to help businesses finance their accounts payables.
Investors’ interest in cybersecurity continues in the wake of several high-profile cyberattacks on global corporates. This week U.S.-based Awake Security said it raised more than $30 million from Greylock Partners and Bain Capital Ventures, while simultaneously announcing that its security analytics solution is now available to customers. Awake Security uses machine learning and data science to boost efficiency in how cybersecurity companies detect and mitigate cyber threats that those businesses had previously missed. The startup automates much of the manual processes for cyber-investigators, it explained, allowing businesses to accelerate detection of insider threats, data exfiltration and other cyberattacks.
The $1.6 million in venture capital raised by Zego sees the company targeting a niche market: providing insurance for gig economy drivers. Considered what the industry calls an “InsurTech” startup, Zego, based in the U.K., offers a pay-as-you-go service for gig workers that drive around while they’re on the job. It also automates back-end processes like broker management and timestamps, reports said. LocalGlobe led the seed funding round, which will be used to strengthen its underlying technology capabilities, the company said.