B2B Payments

SMB Card FinTech Bucks Coronavirus Uncertainty With Funding

Fintech VC funding

It’s too soon to tell how coronavirus will impact the venture capital ecosystem, but some analysts are turning to the economic crisis of 2008 to make some educated guesses.

In a recent report, CrunchBase looked back at how VC investors reacted to the market downturn over a decade ago. The publication pointed to commentary from angel investor and entrepreneur Jason Calacanis, who predicted “that 50-80 percent of the venture-backed startups currently operating will shut down or go on life-support.”

Separate analysis from Redpoint venture capitalist Tomasz Tunguz explored what coronavirus will do to today’s venture capital climate, similarly turning to 2008 for guidance.

“Investing velocity fell by half … in the quarters following the [2008] crash,” he wrote in a recent report, noting that it took eight quarters for VC funding to return to previous levels.

“Comparing one crisis to another is one way of trying to gauge the potential impact [of coronavirus],” he continued, though noted “it’s a bit dodgy because so many things are different.”

As investors and startups remain on-edge about exactly how this will play out, only a few B2B technology startups announced their own investments this week. Even so, an impressive $114 million was raised by U.S. companies, including $75 million landing at one FinTech looking to bolster small business credit card payment adoption.

Pathlight

California’s Pathlight announced a $7 million Series A funding round this week for its B2B technology that enables businesses to streamline day-to-day team management operations. Through real-time analytics and communication tools, the platform supports collaboration across workforces while providing insights into goals and historical trends.

Investors at Kleiner Perkins led the round, a press release said. The company continues to expand for corporate customers across borders while also being able to support remote workforces, a particularly valuable proposition in today’s market climate.

Forager

Servicing logistics companies, Forager enables cross-border solutions like shipping for businesses that face challenges when expanding globally. The company has announced a $10 million Series A funding round led by U.S. Venture Partners, while existing backer Chicago Ventures and newcomer Soma Capital also participated, according to a press release.

U.S.-based Forager said it plans to deploy the funding to bolster its engineering and product teams, accelerate product development, and bring on new logistics personnel after launching its SCOUT logistics platform earlier this year to streamlining pricing and booking of shipments on a global scale.

In a statement, USVP General Partner Rick Lewis said the company “has a totally unique solution that was purpose-built to address the challenges associated with cross border shipping,” with solutions designed to target friction for shippers, carriers and end-customers.

Arkose Labs

Anti-fraud technology startup Arkose Labs announced a $22 million Series B funding round for its technology, which is already deployed at corporate customers like Microsoft, Singapore Airlines and GitHub. The company, with offices in California and Australia, landed funding from Microsoft’s M12 venture fund, while existing backers PayPal and USVP also participated.

While payments and enterprise technology providers are a key customer target for Arkose Labs, the company noted its application in other industries like eCommerce and gaming. The firm safeguards businesses to mitigate the risk of online fraud for themselves and their customers, combatting attacks including account takeovers, scraping, gift card fraud, spam and more.

Plastiq

Landing the largest funding round of the week is Plastiq, a U.S. FInTech that raised $75 million in Series D funding for its small business credit card technology. Investors at B Capital Group led the round, according to a press release, with existing backers Kleiner Perkins, Khosla Ventures, Accomplice and Top Tier Capital Partners also participating.

Plastiq aims to boost adoption of small business credit cards even in transaction scenarios in which cards aren’t accepted, like many supplier payment cases. Its technology also allows companies to accept payments made by card and receive funds through other rails like ACH, checks and wire transfers, while offering SMBs cash flow and payments analytics in real-time.

The company said it will use the funding to support its rollout of new services for small businesses to integrate and optimize their payments through cards, which, the company said, can offer strategic working capital benefits to SMBs.

The firm’s CEO and Co-founder Eliot Buchanan said Plastiq has “made a number of strategic industry hires that well-position Plastiq to rapidly scale as we continue our mission to champion the underserved SMB segment through this time of economic uncertainty.”

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LIVE PYMNTS ROUNDTABLE: MODERNIZING & SCALING FOR THE NEW NORMAL

The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.

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