FundBox raises $40m to invest in SMEs

An alternative lending startup has received $40 million in Series B round funding.

The rise of financial tech startups has been a hot topic of late as a number of schemes, both government and private, have been set up to support new businesses. However, few small and medium-sized enterprises (SMEs) take it upon themselves to raise money in order to fund others - but that’s what FundBox aims to do.

This startup seeks to loan other businesses money for outstanding invoices from $100 to $25,000, and has now secured $40 million for itself in a Series B round of funding led by General Catalyst Partners. Its new injection of capital will help the firm expand its service around the world in the competitive sector of alternative lending.

Fundbox could help to prevent SMEs going out of business

“There’s an increasing trend that invoices actually get paid over longer and longer periods of time, and cash flow management is now the number one reason these businesses go out of business,” said Hemant Taneja of General Catalyst in a TechCrunch article.

FundBox helps businesses keep up with expenses while they await payment for outstanding invoices by providing short-term loans, and the service is delightfully simple. Its software can be added onto existing accounting software that most SMEs use and uses analysis of a number of variable to build up a risk profile for each invoice.

Potential to beat the competition

Furthermore, users will find applying for a loan is lightning fast. Once the software is set up, it only takes 15 seconds to create an account and 50 seconds for FundBox to underwrite an invoice, according to founder and chief executive officer Eyal Shinar.

This latest round of funding will help accelerate FundBox’s progress, which has come a long way since launching in April 2014. There is still much to be done until the relatively new startup can say it’s caught up with its larger competitors, but despite the competition, the industry is still new enough for an innovation like this to have great potential.