Payments company Stripe stole the B2B FinTech investment show this week with its funding that propelled its valuation to $22.5 billion, just days after the firm announced a partnership with Funding Circle to link its small business customers to financing solutions.
But Stripe isn’t the only B2B financial services and technology firm to have landed an impressive funding round. A common theme among this week’s newly funded B2B startups? Managing risk, whether that’s compliance risk or small business loan underwriting. View below the rundown of B2B companies that landed new funding.
The $100 million funding round for Stripe was led by Tiger Global Management, only a few months after a $245 million funding round for the company last fall and just days after Stripe revealed a collaboration with Funding Circle, which allows businesses to secure funding based on data from sales they have already made. With a current valuation of $22.5 billion, Stripe, which also saw backing from an array of investors including Capital G, Sequoia Capital and Kleiner Perkins, plans to continue to scale internationally and to integrate added features in fraud protection and card issuing.
Also focusing on fraud is Mimiro, a London-based firm that provides financial service providers and corporates with machine learning-powered risk analysis and mitigation solutions. Investors recently funneled $30 million into the company, with Index Ventures leading the Series B round. Existing investor Balderton Capital also participated, a press release said. Mimiro specializes in know your customer (KYC) and anti-money laundering (AML) compliance, a particularly challenging field considering the growing intensity of financial regulations and accelerated cross-border payments, the company told PYMNTS in a recent interview.
Australia-based Humanforce provides human resources, employee time tracking, payroll and other workforce-related services via its Software-as-a-Service (SaaS) offering. The company has just secured $16.4 million in funding, according to reports in Entrepreneur, led by Accel-KKR. Humanforce plans to use the cash to fuel its expansion in Europe, Asia and North America, and to focus its human workforce management technology on industries seeing significant disruption by the gig economy and flex workforce.
Another human capital management company, Zestful, revealed its $1.1 million funding round in conjunction with its product launch. The U.S. company provides customizable employee benefits and wellness programs to help businesses attract and retain talent in ways beyond salary. A press release said Bessemer Venture Partners, Day One Ventures, Matchstick Ventures and Shrug Capital all participated in the investment.
Loan risk management solution provider WEEL, based in Brazil, raised $6 million this week in a round led by Monashees, while Mindset Ventures and Banco Votorantim also participated, reports in Contxto said. The company, which first launched under the name WorkCapital, deploys artificial intelligence and risk analysis to assess borrower risk for lenders and other creditors. Its technology also automates fee verification and interest rate calculation. As of mid-2018, the company said its delinquency rate among clients was just 0.4 percent. The investment means Votorantim Bank will integrate WEEL’s technology to enhance its small and medium-sized business lending operations, reports said. WEEL also noted the funding will go toward data science investments.
While WEEL works with lenders to streamline SMB lending, Growth Street, based in the U.K., offers an array of financing solutions for small business borrowers, as well as cash flow management functionality. The company has announced about $9.3 million in new funding from Merian Chrysalis Investment Company, noting in a blog post that it plans to develop new partnerships and integrations with accountants and other professional services firms. The investment follows news that U.K. challenger bank Starling Bank had added Growth Street to its third-party marketplace, while Growth Street has also made open banking a key component of its operations to accelerate credit underwriting processes.
Another U.K. small business lender, Iwoca, secured $9.3 million in funding this week from the FinTech Augmentum, though reports noted the investment is part of a larger round that Iwoca has yet to announce. The company reportedly will use the funds to strengthen its balance sheet and focus on analytics to expand small businesses’ access to credit in the U.K. and Europe.
India’s CreditVidya is another B2B FinTech operating in the credit risk management space, providing creditors with an alternative credit scoring solution. Bharat Innovation Fund led $3 million in seed funding for the company, reports said this week, while additional backers also participated. The company wants to help lenders deploy Big Data and sophisticated technology to underwrite loans and lower delinquency rates. CreditVidya said it will use the investment to focus on expanding its credit underwriting platform and target particular industries, including payments and eCommerce, by linking companies in these sectors with solutions to extend credit to their own customers.
Another startup that has developed technology for financial institutions is Finxact, a U.S. firm that announced $30 million in new funding from a range of backers, including American Bankers Association, Accenture Ventures, SunTrust Bank and others. The company provides core banking SaaS for FIs that allows seamless integration across platforms and services. The company said it plans to use the investment to further its integration capabilities and help banks mitigate the risk financial institutions can face when migrating core systems.
Date: February 4, 2019