A Niche Market Strategy Creates B2B FinTech’s Next Unicorn

The start of 2021 opened up with a flurry of activity in the B2B FinTech venture capital space, but as March moves ahead, funding activity seems to have settled down. This week’s investment roundup includes just four deals, but still managed to pull more than $114 million in collective funding. Notable investments include funding for a small business data platform from American Express and PayPal, plus the emergence of a new unicorn placing a new spotlight on B2B FinTechs with niche targets.

Codat

While business data platform provider Codat did not disclose exactly how much it raised for its Series A investment round, the company did reveal some high-profile backers, including PayPal Ventures and American Express Ventures, while existing investor Index Ventures also participated. With the new funding, Codat has also announced its official launch in the U.S. The company operates a solution to facilitate back-office tools with each other via an application programming interface (API), with a focus on small and medium-sized businesses. That includes data connectivity between SMBs and their financial institutions, lenders, payment service providers and a range of other financial tools like expense management software and corporate cards.

“We’re excited to welcome American Express Ventures and PayPal Ventures as investors to further our mission to make life easier for small businesses,” said Codat Founder and CEO Peter Lord in a statement. “It’s clear that small businesses are the backbone of global economies, and in the next few years, we believe there will be a dramatic acceleration in the quality of financial products they are offered. We believe it starts with an industry-wide shift from siloed data to a more connected ecosystem. Our new investors further fuel our ambition to improve operations for SMBs everywhere.”

Monite

The small business accounting automation landscape continues to grow more crowded, with one industry player digging its heels deeper into the market with $1.32 million in fresh funding. The pre-seed funding was provided by Tomahawk VC, signals Venture Capital, InVentures and Runa Capital, according to an announcement. The Germany-based startup aims to connect small and medium-sized businesses with accounting technology that automates administrative workflows that tend to take up the majority of financial professionals’ time. According to the company, SMBs can spend as much as 15 hours every week — or 19 percent of their time — on financial administrative tasks that don’t add value to the enterprise.

Monite aims to address that pain point by directly integrating into businesses’ bank accounts to handle workflows like invoicing, employee expenses, bill payment and auto-mapping data for accounting come reporting and tax time. In a statement, Monite CEO Ivan Maryasin said, “Before launching the platform we’ve studied more than 300 SMEs and freelancers across Europe and found 76.5 percent of them prefer to use one platform for the admin needs, rather than constantly switching between. five or six narrowly-focused tools.”

The new funding will allow Monite to launch later this year and is already planning platform and product upgrades.

Countingup

The $12.7 million in new investment for U.K.-based Countingup will help the company more than double its staff count as it accelerates its product roadmap with an eye on tax filing, support for multi-currency invoicing and payments, and new financial services. The company currently offers businesses a bank account linked to a Mastercard, alongside accounting, invoicing and tax management tools. Reports in TechCrunch said the firm’s Series A investment stems from Framework Venture Partners, which led the funding, while existing backers Gresham House Ventures and Sage also participated.

“Investing in high-growth SaaS businesses is core to our strategy to enable small businesses and accountants to survive and thrive,” said Neal Watkins, executive vice president, Small Business Segment at Sage, in a statement. “This is an exciting opportunity to be part of the startup journey in a new way as businesses explore the benefits of bringing accounting and financial services together.”

Infra.Market

In a sign of confidence among investors for B2B FinTechs that target niche customer segments, India’s Infra.Market has secured a $1 billion valuation thanks to its $100 million Series C investment round — the largest in this week’s roundup. Investors at Tiger Global led the funding, and existing backers Accel Partners, Nexus Venture Partners, Evolvence India Fund, Sistema Asia Fund and Fundamental also participated.

According to the Economic Times of India, Infra.Market operates a B2B online marketplace designed for the construction industry, allowing businesses in the sector to procure raw materials. The company aims to streamline the procurement process for both buyers and suppliers, with a focus on empowering small manufacturers. Founder Souvik Sengupta said the company is “seeing rapid acceleration in demand as infrastructure and real estate companies are looking to shift their procurement to get consistent quality and minimize delays.”

The company said it plans to use the funding to strengthen its underlying technology, enter into new markets, and strengthen its operations in direct-to-retail and other growth channels.