The U.K. challenger banking market saw a flurry of venture capital (VC) activity this week, as FinTech firms aim to disrupt small business (SMB) financial services (FinServ). The largest round of the week went to OakNorth, but other significant investments landed at supply chain management, corporate accounting and small business finance players, totaling more than $821 million in total VC funding. PYMNTS breaks down all the latest B2B funding rounds below.
Compliance startup Chainalysis works with law enforcement officials and financial institutions (FIs) to ensure that their cryptocurrency operations are within regulations. The company announced a $30 million Series B investment round this week, led by Accel, said reports in Fortune. The company plans to use the funds to expand operations, with a focus on its Know Your Transaction (KYT) solution, which enables FIs and cryptocurrency exchanges to conduct Know Your Customer (KYC) checks. Chainalysis also plans to open an office in the U.K that will focus on research and development (R&D), reports said. In the past year, corporate customers have become a larger portion of its customer base.
Open Financial Technologies
India's Open Financial Technologies raised $4.6 million in Series A funding this week, led by Singapore-based BEENEXT and 3one4 Capital, reported VCCircle. The company automates collections and payouts for small businesses, partnering with banks to provide accounting automation, cash flow management and accounts receivable solutions that FIs can offer their own SMB customers. Furthermore, Open Financial operates its own application programming interfaces (APIs) to integrate banking data into these workflows, reports noted. The funding also saw participation from Speedinvest F EuVECA, Unicorn India Ventures and AngelList. Reports did not indicate exactly how Open Financial plans to use the investment.
What started out as a B2C fashion eRetail company has now morphed into a firm targeting companies in the retail supply chain with back-office solutions. Zilingo announced a $226 million investment from a range of backers this week, including Sequoia Capital, Burda Principal Investments and Sofina. The Series D funding, one of the largest for a Southeast-Asian eCommerce startup, will be used to ramp up Zilingo's focus on fashion supply chain management solutions, including procurement, inventory management, payment processing and financing for companies selling on the Zilingo platform. Today, the company said, its B2B operations account for 70 percent of the firm's net revenue growth.
Goldman Sachs led the way for small business credit platform Nav to land $44 million in new funding, reports said this week. Nav links SMBs to their business credit score data, while connecting them to financiers. Goldman was joined by Point72 Ventures and Experian Ventures in the latest funding round, which will be used by Nav to focus on further developing its technology and platform, and to broaden its reach in the small business community. The funding follows a recent announcement from Experian to join its two largest rivals, Equifax and Dun & Bradstreet, in displaying small business credit scores on the Nav platform.
The largest funding round of the week went to challenger bank OakNorth, which raised $440 million from the SoftBank Vision Fund and Clermont Group. OakNorth Holdings has now raised more than $1 billion, more than any other FinTech across Europe, according to reports. OakNorth operates in the U.K. to bridge businesses with financing and support for growth by working with lenders and supporting their underwriting processes. OakNorth plans to use the investment to launch its Analytical Intelligence platform with more banks and lenders across the globe.
OakNorth wasn't the only U.K. challenger bank to secure funding. Starling Bank announced nearly $77 million in Series C venture capital this week, led by Merian Global Investors, and will use the funding to invest in its digital products within the small business and retail banking space. Starling noted that it also plans to accelerate its global expansion, first focusing on Europe, with aims to reach 1 million customers by the end of 2019. The company currently services 30,000 small businesses and 460,000 consumers, reports said.