Alternative finance apparently won’t stop catching the attention of investors — at least, not any time soon, if this week’s B2B venture capital roundup is any sign. The industry landed $90 million in funding, accounting for four out of the 10 funding rounds announced by B2B startups.
Yet, alternative lenders landed only a fraction of the more than $455 million raised. Instead, startups in the payments processing, commercial card and cybersecurity market landed the top rounds of the week — with one company securing a $3 billion valuation with its massive investment.
California’s Drip Capital secured $15 million in Series A funding this week in a round led by Accel Partners, Sequoia Capital India and Wing VC, according to VCCircle reports. Existing backer Y Combinator also participated. Drip Capital provides small- and medium-sized businesses (SMBs) with working capital loans with a particular focus on businesses that need to finance their cross-border trade operations. Though the firm is headquartered in the U.S., reports noted its focus on the Indian market and its need for trade finance for exporters. Drip said it will use the funds raised to scale up and enter new markets.
Another trade finance player, TradeIX, landed $16 million in funding from ING Ventures, BNP Paribas, Tech Mahindra and Kistefos, according to a press release. TradeIX integrates blockchain technology and a decentralized API platform to integrate into existing trade platforms. The U.K. company said it will use the investment to increase hiring and customer acquisition, as well as to bolster its underlying infrastructure. The company previously struck a partnership with blockchain firm R3 to support international financial institutions’ (FIs) development of blockchain-powered trade finance and other transactions. As it continues its expansion, TradeIX is focusing on trade payments, risk mitigation, payables finance and receivables finance, the company said.
With $34 million in fresh funding, small business invoice factoring company FundThrough said it plans to expand from Canada into the U.S. The Series A round of equity funding was led by ScaleUP Ventures and David Mirvish, the firm said in an announcement, as well as other entrepreneurs. FundThrough said in its press release this week that it also plans to accelerate technology development and expand customer volume, and integrate its solution into platform partners. The company targets SMBs struggling with late invoice payments and subsequent cash flow gaps.
The alternative small business finance market is clearly having a hot week, but it’s uncommon for a Mexico player to land on the investment board. This week, Konfio bucked the trend with its $25 million Series C investment round led by Vostok Emerging Finance and existing backers Quona Capital, QED, Kaszek Ventures and International Finance Corporation. Konfio offers an unsecured lending platform with integrated data analytics capabilities to target underserved SMBs in Mexico. The company said it will use the funds to continue investing in its technology and entering market segments beyond unsecured business term loans as it develops new financing products, a press release noted.
GPS, or Global Processing Services, secured more than $58.2 million in funding from Dunedin, according to the Telegraph, making its investment round one of the largest for the FinTech market this year. GPS provides FIs with its payment processing service, and the investment comes as the company readies the launch of GPS Apex, targeted toward new FinTech market entrants, according to reports.
A $30 million fund raise led by Investment Management Corporation of Ontario (IMCO) will help the job hunting platform expand through new hires in its product and sales team, as well as product development, the company said in a blog post this week. Hired is readying the launch of its subscription service to provide businesses with an automated way to assess and hire job candidates. The company is also launching additional features, including intelligent job matching for job seekers, as well as enhanced analytics features for employers.
Working in the human capital market, IndiQube provides startups and professionals with shared workspaces, with a focus on SMBs. The company, based in India, raised $15 million in Series A funding — though, confusingly, reports in Entrackr noted the company was in talks to raise Series B funding in late 2016. The firm secured funding from WestBridge Capital and Ashish Gupta, and marks the second-largest funding round for a workspace startup in India. IndiQube plans to expand across the country with the latest investment, reports noted.
Commercial card startups are a rarity but, this week, Brex bucked the trend with an impressive $57 million raised by Y Combinator Continuity, as well as PayPal Founders Peter Thiel and Max Levchin, Yuri Milner, Ribbit Capital and former Visa CEO Carl Pascarella. Brex has designed a commercial card product built especially for startups, which struggle to access card products because issuers often base card approvals on corporate profits. While startups may have secured their own funding, their financial status prohibits them from qualifying for many traditional card products, Brex said in its announcement. The company said it will use the Series B funding to add key board members amid its official launch.
Cloud-based SMB accounting startup Karbon sees opportunity in the failed merger between fellow Australian accounting players MYOB and Reckon. The company, which just raised $5.16 million for its accounting software, said in an interview with the Australian Financial Review that businesses and their accountants are headed for a buying cycle over the next three years, meaning these customers are ready to switch providers. Blackbird Ventures led the investment, reports noted, and though the company is based in San Francisco, about half of its staff of 20 is based in Sydney.
By far, the largest funding round of a B2B startup this week went to CrowdStrike, which announced $200 million raised for its enterprise cybersecurity solution. The investment — led by Accel, General Atlantic, IVP, CapitalG and March Capital — pushes CrowdStrike into the territory of a $3 billion valuation, according to VentureBeat reports. The company positions itself as a proactive cybersecurity firm, enabling businesses to predict and mitigate a cyberattack or data breach before it occurs. According to the firm, it hopes to address the impending talent shortage in the enterprise cybersecurity market. However, its work in the investigation showing that Russia breached the Democratic National Committee in 2016, as well as its assessment of North Korea’s suspected involvement in the Sony Pictures hack of 2014, likely impressed investors of the Series E round.
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