September 3, 2019
Thought leaders across the globe suggest that the SME market is the next wave of focus for FinTechs. There is a long list of FinTech players that are focusing on payments, B2B systems, and especially, lending solutions. The unmet SME lending requirements present huge opportunities for new-age alternative lending providers to intrude into the system, putting pressure on the way lending is done by legacy banks. In an interview with Forbes, Rob Frohwein, CEO of Kabbage, said, “Banks have underserved small businesses in need of $250,000 or less for decades. And it’s not that banks don’t want to or it’s difficult and costly. It costs them the same amount of money to underwrite a $5,000 loan or a $5,000,000 loan.”
SME-focused FinTech players have delivered innovation across loan origination, underwriting, documentation, data management, profile management, and loan servicing. Unlike traditional lending, alternate lending requires the company’s bank statement for the previous 12 months, supporting documents such as invoice copy, receipts against payments, references, canceled checks, digital footprints of the borrowers, online transaction history, and more.
Klarna and C2FO’s new funding rounds In August indicate promising growth in the SME-focused FinTech segment. With the latest funding round, Klarna became the most-valued FinTech in Europe. Here is a list of 20 such promising FinTech across the globe that focus on SMEs:
Klarna is a Sweden-based provider of payment solutions for e-commerce customers. The company offers an integrated mobile payment & checkout platform that allows customers to pay after they receive the goods instead of when they order them. Recently, the company received a full banking license from the Swedish Financial Supervisory Authority; the company plans to launch P2P payments services. The company has raised $1.08 billion in funding, becoming the most-valued FinTech in Europe with $5.5 billion in valuation.
Acorn OakNorth Holdings is a UK-based company founded in 2015. The company has raised $1 billion in total funding. OakNorth is a digital-only bank which provides banking services for individuals and businesses. It received approval for a full banking license in 2015. OakNorth offers an SME lending platform that provides debt finance to businesses and real estate property developers/investors. It provides financing ranging from £500K to £40 million to small and medium-sized businesses.
Kabbage is a United States-based company founded in 2009. The company has raised approximately $490 million in total funding. Kabbage provides SMBs with a line of credit by evaluating various alternative data parameters. It leverages data generated through business activity such as accounting data, online sales, shipping is and dozens of other sources to understand performance and deliver fast, flexible funding in real time. The company also provides white-label platforms to companies wanting to start their own lending platforms. Recently, Kabbage was selected for the 2019 Forbes FinTech 50 startups list.
Caogen Touzi is a China-based company founded in 2013. The company has raised $521 million in total funding. Caogen Touzi is a Chinese FinTech startup that provides investment products for small and medium-sized enterprises (SMEs) and individuals.
Greensill is a United Kingdom-based company founded in 2011. The company has raised $1.1 billion in total funding. Greensill is an alternative lender that provides working capital finance for SMEs globally. Till date, it has facilitated payments to 1.5 million suppliers and provided over $40 billion of financing across 50 countries.
Dashu Finance is a United States-based company founded in 2014. The company has raised $210 million in total funding. Dashu Finance provides unsecured loans and financing services for small and micro-enterprises. It currently operates in six Chinese cities and provides loans to small business owners, university graduates, government workers, and others.
C2FO is a United States-based company founded in 2008. The company has raised $397.7 million in total funding. C2FO is an online B2B marketplace that uses a bid system and algorithms to match buyers sitting on extra cash with suppliers ready to accept discounts for payments.
OnDeck is a United States-based company founded in 2007. The company has raised $190 million in total funding. OnDeck is an online platform providing loan financing to small and medium-sized businesses. The company uses data aggregation and electronic payment technology to evaluate the financial health of small and medium-sized businesses and efficiently deliver capital to a market underserved by banks. The company had its IPO in December 2014.
BlueVine is a United States-based company founded in 2013. The company has raised $183.5 million in total funding. BlueVine allows small businesses to get paid immediately on their outstanding invoices. With BlueVine, companies can free up their cash for paying expenses and growing their business. The company offers credit lines starting at $5k for a business line of credit and $20k for invoice factoring.
Behalf is a United States-based company founded in 2011. The company has raised $156 million in total funding. Behalf offers on-demand purchasing solutions to US-based SMBs. It provides access to short-term financing for businesses of all sizes, with flexible repayment terms. It evaluates the creditworthiness of an individual by leveraging big data analytics. Instead of directly issuing funds to the SMB, it pays small-business vendors on its behalf.
LendingKart is an India-based company founded in 2014. The company has raised $173 million in total funding. Lendingkart is a lending startup that provides small businesses and entrepreneurs access to working capital loans. It evaluates the creditworthiness of a customer’s business by leveraging big data & analytics. It also has another non-banking finance (NBFC) unit named Lendingkart Finance, which raises money from financial institutions & banks and lends it to customers.
PPmoney is a China-based company founded in 2012. The company has raised $144 million in total funding. PPmoney is an online investment and lending platform. It enables users to invest in different loan products. The business can borrow working capital loans such as invoice discounting, factoring, and more, while individuals can avail asset-backed loans.
Judo Capital is an Australia-based company founded in 2016. The company has raised more than $500 million in total funding. Judo Capital provides an online lending platform for SMEs, which enables them to avail financing solutions for their business needs. It provides credit ranging from $250,000 to $5,000,000.
InCred Finance is an India-based company founded in 2016. The company has raised $174.9 million in total funding. InCred Finance is an alternative lending platform which focuses on SME loans, consumer & personal loans, home loans, and education loans.
Capital Float is an India-based company founded in 2013. The company has raised $110 million in total funding. Capital Float is an online platform that provides working capital financing to SMEs in India. The company offers short-term loans that can be used to purchase inventory, service new orders, or optimize cash cycles. The company has issued loans to businesses from their loan book and also through its lending partners.
Fundbox is a United States-based company founded in 2012. The company has raised $107.5 million in total funding. Fundbox offers business owners a simple way to fix their cash flow by advancing payments for their outstanding invoices. Fundbox advances thousands of invoices weekly, offering small-business owners the ability to optimize their cash flow by advancing payments for unpaid invoices.
Daixiaomi is a China-based company founded in 2013. The company has raised $95.9 million in total funding. Daixiaomi is an online B2C lending platform for individual customers and SMEs. It allows users to compare and directly apply for a loan using its online platform.
NeoGrowth Credit is an India-based company founded in 2011. The company has raised $90.7 million in total funding. NeoGrowth is a technology-enabled lending business that provides unsecured loans to small retailers in major Indian cities including Mumbai, Delhi, and Bangalore. Borrowers have to option to repay by future card receivables, e-commerce sales, and other non-cash payments. It combines new payment datasets, traditional scoring, dynamic repayment & automated collections to identify and serve creditworthy merchants. Merchants are not required to pay fixed monthly installments, but instead, make automatic repayments as a portion of their sales made with electronic card payments at the point-of-sale (card settlement). The company also offers NeoCash Online, which is designed exclusively for online sellers on e-commerce marketplaces and retailers selling online through independent portals.