B2B Venture Capital Activity Slows But Shows Signs Of Upcoming Activity

B2B venture capitalists seem in a bit of a summer haze. Analysts say investment in the B2B FinTech space is rising, but this week, only three funding rounds closed (in alternative lending, Big Data and a matchmaking service linking enterprises to R&D services). But fear not: one venture capital firm just closed a $131-million fund with plans to funnel that cash into B2B startups.

Alternative Lending

Qupital

Based in Hong Kong, Qupital provides an online platform for SMEs to access receivables financing. The company revealed $2 million in new funding this week, with the seed funding provided by MindWorks ventures and Alibaba Entrepreneurs Fund. DRL Capital, Aria Group and other backers also participated, reports said.

According to reports, more than a quarter of Hong Kong’s 300,000 small- and medium-sized enterprises are facing cash flow challenges, and delayed invoice payments play a significant role in that problem. Analysts estimate there is a $200-billion financing gap in Hong Kong’s SME space, while its accounts receivables market is worth more than $3 trillion a year.

“We began our journey together in Hong Kong when we noticed that there were many businesses here that had cash locked up in unpaid invoices while being underserved by traditional lenders with slow and cumbersome processes,” said Qupital cofounder Andy Chan.

“Qupital’s vision is to help inject liquidity into the market, reducing SMEs’ cost of financing and enabling professional investors access to an entirely new asset class of accounts receivable,” added cofounder Winston Wong.

The company said it will use the financing for regional expansion and support its SME lending platform.

Big Data

PHEMI

Based in Canada, PHEMI provides Big Data services to companies in need of privacy and governance of their data. This week PHEMI said it raised $10 million in venture capital from Quark Venture Inc.and GF Securities, while existing backers CTI Life Sciences Fund, BDC Capital Healthcare VentureFund and Yaletown Partners all co-led the round.

PHEMI’s selling point is it enables companies to share data without compromising privacy and security, it said in its announcement. Access to that data means enhanced competition and innovation, as well as greater operational efficiency.

“We recognize the potential Big Data holds for a growing number of companies operating in both the life sciences industry and other verticals,” said Karimah Es Sabar, CEO of Quark Venture and director of GHS Fund, in a statement. “It has become readily apparent that the demand for Big Data solutions will continue to grow, and PHEMI demonstrates leadership and innovation in advancing requisite, enterprise-grade Big Data solutions.”

PHEMI said it will use the funding to focus on research and development, as well as sales outreach.

Matchmaker

Science Exchange

Matchmaking, both B2C and B2B, is a hot trend, going way, way beyond ride sharing or on-demand lodging. Science Exchange, a company that matches companies with R&D service providers, raised $28 million in Series C funding, reports this week said, as yet another example of the potential for B2B matchmaking services to disrupt the market.

Norwest Venture Partners led the funding, which also saw Union Square Ventures, Maverick Capital and Collaborative Fund all participating in the round.

Science Exchange provides a network of contract research shops, allowing companies to search for these providers within their targeted fields. The company charges a transaction fee and handles back-end processes, including much of the legality and compliance needs; according to the firm, Science Exchange can save businesses months off of the R&D process because it fast-tracks contracting, plus saves money on legal fees. With the new funding, Science Exchange said it will focus on growth. At present, most of its clients are based in the U.S., but it does have presence across the globe. With the outsourced R&D market estimated to be worth $140 billion for the biotech and pharmaceutical spaces alone, analysts say Science Exchange could capture significant revenue.

Honorable Mention

Capnamic Ventures

Early stage venture capital company Capnamic Ventures, based in Germany, announced it has closed a new tech fund of more than $131 million. Capnamic said it will target those funds to tech startups that focus on “B2B solutions, digital infrastructure, and digital transformation.”