European FinTech deal this week include Factris, Defacto, Bud, Juni
We feature Q&As with Nigel Verdon of Railsbank and Maximilian Schausberger of Elevator Ventures.
Check out the B2B FinTech Radar, our microsite focused on SaaS / Enterprise FinTech founders with global ambitions
7 Questions with Nigel Verdon of Railsbank
1. Please tell us a bit about yourself and your company.
Railsbank is the leading global Banking-as-a-Service (BaaS) platform. It enables banks, businesses and brands to define the future of consumer and SME finance.
Marketers, product managers, developers, CEOs and founders are able to take their financial product vision and rapidly prototype, launch and scale using Railsbank’s open finance platform which consists of operations, regulatory licensing and a rich set of APIs.
Railsbank was founded by myself and Clive Mitchell in 2016, in London.
My own background started in the financial services industry. My first job working as an engineer in the motor industry and seeing the high levels of automation and “just in time” manufacturing achieved back in the late 1980’s early 1990’s. In the banking world this is called “straight through processing (STP)” and the financial world could learn much from manufacturing/process engineers in the motor industry.
I then learnt so much working in the capital markets business in one of the most innovative banks in the industry Swiss Bank Corp (today called UBS). This was back in the early-mid 1990s when this “internet thing” appeared on the scene.
Swiss Bank Corp were really the first real innovator to leverage technology in the capital markets area of banking to leapfrog the competition (e.g. better risk management, better options pricing etc.).
I built my first startup, Evolution, based on my experiences at Swiss Bank Corp to take the “internet enablement of capital markets” to many amazing customers like Goldman Sachs and UBS.
Roll on to 2007 and I had just left Dresdner Kleinwort Wasserstein to set up Currency Cloud. I founded Currency Cloud because the experience of a traditional currency broker at the time (name not mentioned!) was charging me 4% “no commission” and asked me to fax back my confirmation note and payment details to them! I didn’t own a fax machine!
So, with a colleague, Nick Bourner from Evolution (who is now currently Chief Architect at Railsbank) we built the Currency Cloud platform to offer straight through processing of physical FX and payments via APIs (we were the trail blazers in the API led fintech industry).
At Currency Cloud, we worked on jump-starting many fintech 1.0 clients like Transferwise, Revolut, Azimo and World Remit, which were born out of a demand by consumers to take more control over their finances and after the trust lost in banks in the aftermath of the credit crunch.
However, the Currency Cloud experience gave me an insight into how the old world banking industry worked, with a realisation that both the banking infrastructure and the banking industry itself, was clearly not adapted to the new digital world, and certainly had no clue about what a well designed API led business should look like. So, this experience led me to co-founding my current startup Railsbank, focused on solving this industry pain point for customers.
7 Questions with Maximilian Schausberger of Elevator Ventures
1. A year since the first lockdowns- is this is a good time to be building or scaling an Enterprise FinTech (/InsurTech) firm in Europe?
Despite all the difficulties that 2020 has brought for entrepreneurs, some sectors have also benefited. We see Enterprise FinTech benefiting from an increased need for digitalization and for efficient operations in banking and insurance. As an example from the financial sector, Raiffeisen Bank International saw double-digit growth in its mobile banking users over the first half of 2020 (see here). This also creates many opportunities, which seem to have fueled investor appetite in 2020.
Amsterdam fintech company Factris raises €10M to help finance trade-related invoices for European SMEs
Factris, an Amsterdam-based fintech company, announced on Thursday that it has raised €10M through its partnership with NN Investment Partners (NN IP), a Goldman Sachs-owned asset manager specialising in fund management, fixed income strategies, and integrated client solutions.
The fintech startup says that the funds will be used to finance trade-related invoices for European SMEs.
Founded in 2017 by Brice Laurent and Marcel Meijer, Factris is on a mission to provide quick and affordable capital to SMEs across Europe using financial technology with personalised guidance.
Factoring, which is Factris’ primary form of financing, helps customers by providing working capital using their unpaid invoices.
Factoring is a financial transaction and type of debtor finance in which a business sells its accounts receivable (i.e., invoices) to a third party (called a factor) at a discount. A business will sometimes factor its receivable assets to meet its present and immediate cash needs.
Factris claims that this alternative form of financing has proven to be faster in sourcing the required cash flow to businesses when compared to the more traditional forms of financing, such as businesses applying for a bank loan.
According to a statement, Factris’ double-digit growth over the last year reflects the increased demand for invoice factoring from SMEs. For instance, the company claims that its portfolio grew by 41 per cent in 2022 compared to 2021, and over 32 per cent more customers than the year before.
The war in Ukraine and the ongoing COVID-19 outbreak, both of which are posing enormous financial challenges to SMBs across the EU, are contributing to the rise in demand for finance.
Defacto Raises €15M in Funding
Defacto, a Paris, France-based API-first B2B lending platform, raised €15m in funding.
The round was led by Northzone with participation from Headline, Global Founders Capital, and business angels Thibaud Elzière (founder of eFounders), Rodolphe Ardant (founder and CEO of Spendesk), Didier Valet (former Deputy Chief Executive Officer).
The company intends to use the funds to expand its activities in Spain, the Netherlands, Belgium and Germany.
Founded in June 2021 by Jordane Giuly, the former co-founder of Spendesk (the expenditure management platform recently valued at more than 1.5 billion euros), Morgan O’hana and Marc-Henri Gires, Defacto provides transparent and instant financing to small and medium-sized enterprises (SMEs). This solution, which uses an API, integrates directly with marketplace tools, e-commerce platforms and others.
Since its launch in France, Defacto has developed partnerships with more than 15 major B2B marketplaces, FinTechs and e-commerce companies. The company has granted more than €30 million in short-term financing to SMEs through partners.
Bud, an open banking fintech used by HSBC, raises £64m
Bud, an open banking fintech startup used by the likes of HSBC and Credit Karma, has banked $80m (£63.8m) in a Series B funding round.
Bud said it will use the capital to continue developing its platform, which uses artificial intelligence (AI) to let financial organisations offer customised products and automate lending decisions.
As part of the investment, Chronos will rebrand to Founders Law but will operate as an independent business.
The move is aimed at providing legal services to high-growth tech scaleups in Founders Forum’s network in areas including fundraising, commercial agreements, employment law and data protection.
“Most tech businesses require flexible legal services that don’t fit the traditional law firm model,” said Tom Bohills, founder of Chronos Law. “Our services are designed to scale with the ambitious startups we support.”
Founders Forum did not disclose the financial terms of the Chronos Law deal but said it will replicate the approach it took with Founders Keepers, an executive job search company that now provides hiring services to the group’s network.
Juni, a Swedish FinTech Platform for eCommerce, Raises $206M
Swedish eCommerce FinTech Juni has raised $206 million in a Series B and venture debt funding round, a press release said, with the money going to fuel hiring and growth, as well as product development.
Juni was founded in 2020, and is a financial management platform working with businesses on physical and virtual cards, credit cards, accounting, analytics and digital ads, and gives businesses a “holistic view” of their finances.
E-commerce sales have reportedly been forecasted to hit “trillions” by 2025, with digital ad spending also likely to grow. The company has been working on expanding, and has rolled out U.S. dollar accounts and cards, a new Google Ads integration and a new brand identity, the release said.
Juni Co-Founder and CEO Samir El-Sabini said he knew “first-hand the frustrations of running an eCommerce business and time wasted on spend management, the lack of visibility of cashflow and scaling ad campaigns.”
“With this funding, we will help ecommerce businesses win by building the right insights, features and integrations while injecting capital into their marketing spend,” he said. “We’re committed to building the best financial companion for ecommerce and we’re thrilled to have fantastic investors onboard who share our strategic vision.”
The company raised $100 million in a Series B round, and $106 million in venture debt funding from TriplePoint Capital.
The Series B was led by Mubadala Capital. EQT Ventures, Felix Capital, Cherry Ventures and Partners of DST Global, all of which are existing investors with the company, also participated, the release said.
Fleetcor to acquire cross-border paytech Global Reach
Fleetcor Technologies, a global business payments company, has signed a definitive agreement to acquire Global Reach, a UK-based cross-border payments provider.
The acquisition, says Fleetcor, “strengthens its position as one of the largest non-bank global cross-border providers in the world”.
The transaction is expected to close in Q4 2022, subject to regulatory approval and standard closing conditions.
Founded in 2001, London-based Global Reach has developed a presence in the UK, Canada, Spain and the Netherlands. It claims “thousands” of corporate clients primarily in the UK and Canada, providing an overlapping footprint to Fleetcor’s current cross-border payments business.
Fleetcor’s main focus is on corporate payments – it provides solutions that enable and control expense-related purchasing and payment processes.
London’s Felix Capital wraps up €562 million fund to back Web3 startups
The newly unveiled fund will support 20-25 companies across Europe and selectively in North America
London-based VC firm Felix Capital has closed its fourth fund at €562 million. The biggest fund, since its launch in 2015, takes the total managed by the VC to $1.2 billion.
The newly unveiled fund will support 20-25 companies across Europe and selectively in North America. One key area the firm hopes to grow into is Web3.
Operating at the intersection of tech and creativity, focusing on innovations that enable digital lifestyles, Felix wants to partner with entrepreneurs for ground-breaking ideas and help them build trusted brands that push the world forward. The firm will invest in every key aspect of people’s personal lives, including food, shopping, health, wellness, personal finance, entertainment, communication, or gaming.
HTGF launches new fund of 400 million euros – “positive sign” for the scene
The semi-public High-Tech Gründerfonds (HTGF) is setting up a new fund, its fourth and largest to date: more than 400 million euros have been raised in the first closing, according to its own information. The investment commitments come from the Federal Ministry of Economics and Climate Protection and KfW Capital. More than 130 million also come from private donors. Among them are several family offices that do not want to be named, as well as large German companies such as Deutsche Bank or SAP.
A second closing is scheduled for later this year. In view of the uncertainty that currently prevails in the startup scene, the deal should be seen as a positive signal to the startups, HTGF CEO Alex von Frankenberg told Handelsblatt.
The Ukraine war, rising interest rates and inflation as well as supply chain problems have put a temporary end to the golden startup times in this country as well. Some people already see parallels to the bursting of the dot-com bubble. According to Handelsblatt, there have also been two cases at HTGF in which investment commitments have been cancelled at short notice. Nevertheless, the investment company is calmly looking at the current market situation.
Cathay Innovation and Ledger Launch €100M Fund
Ledger, the crypto-security platform securing cryptocurrencies, NFTs and tokens, and Cathay Innovation, a global venture capital firm, have launched a €100M ($110M) early-stage venture fund focused on Web3.
Supported by French public investment bank Bpifrance and led by Cathay Innovation’s Denis Barrier and Ledger’s Pascal Gauthier and Michael Louzado, Ledger Cathay Capital will cover cryptocurrencies, decentralized finance (DeFI), blockchains, NFTs, DAOs and the tokenization of everything.
The funding will invest globally in Seed to Series A companies focused on emerging DeFi, security, infrastructure, digital ownership technologies, protocols and more. Ledger has also made direct early investments in startups that will be managed by the Ledger Cathay Capital team.
It gives creators and founders the capital, tools and direct industry access needed to innovate at scale from the very start.
The partnership, already counting various French and international leaders, looks to connect and stimulate a global Web3 ecosystem while bringing greater opportunities to entrepreneurs across Europe, North America, Asia and beyond. The fund will bring a collaborative and community-based approach that helps crypto and Web3 builders meet talent and potential partners, innovate, reach customers and share business strategies to capitalize on major trends and scale products and services worldwide.
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