B2B Payments

Alternative SMB Finance Leads B2B VC Roundup

Alternative SMB Finance Leads B2B VC Roundup

Venture capital (VC) is far from the only funding source for B2B FinTechs.

Bill.com’s initial public offer (IPO) on Thursday (Dec. 12) was largely hailed a success, reaching $22 per share – slightly above anticipated – resulting in about $216.1 million raised, Reuters reported.

At the same time, the New York Stock Exchange has submitted a proposal for a direct listing-style alternative to the IPO, while FinTech Uncapped recently spoke with PYMNTS about connecting small businesses to capital via revenue-based financing, described as a tool that sits somewhere between venture capital and a traditional bank loan.

Despite a growing array of options, venture capital remains a solid funding source for B2B FinTechs, with this week’s roundup accumulating $104.4 million in funding for the ecosystem, with more to come. PYMNTS looks at the latest VC rounds below.

Camino Financial

Investors gave support for the U.S. alternative small business lending market via Camino Financial, a company that announced $8 million in Series A funding this week. The company operates a digital platform connecting Latinx-owned businesses to small business loans and secured the funding from Mexico-based FinServ Crédito Real. Camino Financial said it will use the funding to invest in business intelligence and artificial intelligence (AI) capabilities and to wield data to fill in FinServ gaps for Latinx-owned SMBs.

FintechOS

Based in Romania, FintechOS connects with traditional financial institutions (FIs), providing technology that helps FIs remain competitive through the quick deployment of high-tech solutions. The company raised $14 million in Series A funding, according to reports this week, with Early Bird Venture Capital’s Digital East Fund and OTB Ventures leading the way. Existing backers Gapminder Ventures and Launchub also participated. FintechOS said it will deploy the funding to expand across Europe, with future plans to launch in the U.S. and Southeast Asia.

Qwil

In addition to $200 million in debt, U.S.-based small business financing company Qwil has announced $24.4 million in equity funding led by PeakSpan, with Mosaik Partners, Reciprocal Ventures, Silicon Valley Bank and others also participating, The New York Times reported this week. Qwil targets its alternative financing solution to freelancers and SMBs, collaborating with freelancing marketplaces to help professionals manage cash flow while they wait to get paid. Reports said Qwil plans to deploy the funding to grow its team and fuel customer acquisition.

KredX

In India, invoice factoring startup KredX has announced $26 million in Series B funding led by Tiger Global Management, reports in Business Standard said. The solution provides a short-term working capital solution by financing unpaid invoices at a discount. So far, the company says it has processed more than 500,000 invoices. Reports said KredX plans to deploy the investment to expand its senior leadership team and focus on product development, as well as to invest in intellectual property and strategic acquisitions.

Zetwerk

Also based in India is B2B eCommerce platform Zetwerk, which just announced $32 million in funding from Lightspeed and Greenoaks Capital. Existing backers Sequoia India, Accel and Kaw Capital also participated in the Series B round, reports said. Another B2B online marketplace, Udaan, also saw its Co-founder Vaibhav Gupta, as well as OYO Chief Strategy Officer Maninder Gulati, participate in the round. Zetwerk plans to use the investment to expand across India as it connects original equipment manufacturers, engineering procurement construction clients and manufacturing small businesses on a digital portal.

What’s Head: AvidXchange

The New York Times reported this week that B2B payments processing company AvidXchange is readying its next round of funding with a targeted $2 billion valuation. Unnamed sources told the publication that investors may provide up to $300 million for the company, though AvidXchange declined to comment on the matter.

What’s Ahead: Pear

Venture capital firm Pear has announced a $160 million fundraise for its third fund, which will include a focus on B2B startups as it targets seed-stage companies with solid business models. Within the firm’s existing portfolio is payroll firm Gusto, though it remains to be seen where the latest funding will land.

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PYMNTS STUDY: THE CROSS-BORDER MERCHANT FRICTION INDEX – JUNE 2020

The PYMNTS Cross-Border Merchant Friction Index analyzes the key friction points experienced by consumers browsing, shopping and paying for purchases on international eCommerce sites. PYMNTS examined the checkout processes of 266 B2B and B2C eCommerce sites across 12 industries and operating from locations across Europe and the United States to provide a comprehensive overview of their checkout offerings.

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