SMB Financing Fuels Week Of B2B Venture Capital

Bad news hit the startup community this week as new analysis from CBInsights revealed a significant decline in venture capital (VC) funding in the first quarter of 2020.

The trend is not entirely unexpected and can be attributed to the pandemic, with FinTech funding dropping by 37 percent quarter-over-quarter to $6.1 billion. There was a nearly 20 percent drop in the number of deals solidified in the quarter, too.

Regardless of the news, this week’s B2B venture capital roundup is one of the strongest in months, fueled largely by FinTechs’ focus on connecting small and medium-sized businesses (SMBs) to capital. While enabling SMBs to navigate the pandemic’s cash flow constraints through access to funds is key, investors showed interest in a variety of financing options, from invoice financing to trade finance to commercial credit cards.

Xtracap Fintech

India-based Xtracap secured $1 million in angel funding, YourStory reported. The company connects SMBs to invoice financing via is mobile app Bridge2Capital, targeting retail shopkeepers with a way to finance their outstanding payables. In addition to invoice finance, the company offers SMBs a range of other solutions, including order management and online payments tools. As the company expands, it will be widening availability of its product suite to all customers, the company said, with hopes of full access to all services by March next year.

CCRManager

Trade finance technology startup CCRManager announced $2.12 million in new funding, which will be used to launch its Open Distribution solution. The Singapore company said it will, for the first time, service corporates directly, an expansion of its existing services to collaborate with banks and investors to extend trade finance to businesses. Asia Capital & Advisors led the round, reports said, while Global eTrade Services and Curzon Investments also participated.

Apollo Agriculture

Kenya’s Apollo Agriculture connects small, independent farmers in the country with a product suite that includes working capital financing, data analytics, equipment procurement and more. The company revealed $6 million raised in a Series A funding round led by Anthemis, TechCrunch reported. Through a collaboration with M-Pesa mobile money, Apollo Agriculture connects to farmers via mobile app and uses machine learning and satellite information to link users to the most appropriate offerings. In addition to focusing on new hires, the company said it will use the investment to bolster its balance sheet to be able to expand its own SMB lending operations.

Deel

With pandemic lockdowns remaining in place, it’s no surprise that investors are interested in startups like Deel, a payroll FinTech for remote workers. The company reportedly raised $14 million in Series A funding led by Andreessen Horowitz, unnamed sources told CNBC. The California-based company targets corporates with technology to hire and pay their staff remotely, even if professionals work across borders. Reports did not reveal what Deel plans to do with the money but did note that investors organized the fundraise entirely via video conferencing.

CLARA analytics

CLARA analytics operates as an InsurTech in the workers compensation arena, enabling claims teams to deploy data analytics and artificial intelligence to deliver actionable insights. The company announced via press release a $25 million Series B funding round this week led by Aspen Capital Group, while Oak HC/FT, which also led its Series A round, also participated. CLARA said it plans to deploy the funding to expand globally, grow its talent base and further develop its product for employers and insurance companies.

Ecwid

With an eCommerce-as-a-Service solution, Ecwid announced $42 million in new funding led by Morgan Stanley Expansion Capital, while PeakSpan Capital also participated. The startup targets SMBs with technology to lower barriers to launching their own online operations and shift from brick-and-mortar to digital. With the new funding, Ecwid said it will buy out previous, early-stage investors, as well as to double its staff levels and expand operations.

Coalition

Cybersecurity insurance startup Coalition secured $90 million in Series C funding, TechCrunch reported. The company targets businesses with cybersecurity insurance amid the ever-growing threat of data breaches and other cyberattacks. Valor Equity Partners led the round, while Greyhound Captial, Felicis and existing backers also participated. The company said it would be growing its team in the coming year as it plans to expand into Canada, the U.K., Europe and Australia.

Khatabook

India’s Khatabook announced $60 million in Series B funding, Entrepreneur reported this week. The small business digital ledger platform saw the funding from B Capital Group, while existing backers Sequoia India, Partners of DST Global, Tencnet, GGV, RTP Global, Hummingbird Ventures, Falcon Edge Capital, Rocketship.vc and Unilever Ventures also participated, alongside several angel investors. Khatabook offers SMBs a way to digitally record transactions to more efficiently manage finances and accounting. The company will accelerate product development with the new investment with a focus on financial services, reports said.

Brex

In the largest venture capital funding round of the week, commercial card startup Brex secured $150 million from DST Global and Lone Pine Capital. The extension of its Series C investment round will be used to bolster its product, engineering and design with a focus on the experience of its startup end-users. The funds will also fuel small-scale acquisitions, TechCrunch reported. Amid a slowdown in overall venture capital investment, Brex’s latest fundraise is significant considering its revenue model relies on the spending volumes of its customers. Reports noted that Brex has lowered some customer credit limits in response to the current market and significantly cut spend on travel and restaurants.