Alternative Paris-based lender Finexkap has secured US$22.5mn to launch France’s first online working capital financing platform for SMEs.
Two tranches comprise the financing: US$7.5mn in equity funding and a US$15mn investment to finance the web-based platform’s lending operations.
GLI Finance, an investor in the alternative finance space, invested US$4.1mn as part of the first tranche in July this year, and now takes a 26.4% stake in Finexkap following overall completion of the fundraising. Finsight, a fintech investment fund, is among the platform’s other investors.
A statement released by GLI Finance reveals that, through web-based refinancing vehicles, Finexkap purchases SMEs’ receivables and provides short-term funding solutions to those that require fast access to working capital.
Finexkap purchases SMEs’ receivables and provides short-term funding solutions to those that require fast access to working capital.
The equity portion of the US$22.5mn will be used to scale up data and product operations, increase marketing efforts and recruit staff, whilst Finexkap will use the US$15mn portion to finance the first batch of receivables.
Commenting on the investment, chief executive at GLI Finance, Geoff Miller, says: “There’s a huge demand for this type of flexible finance and innovative proprietary technology, and the platform has huge growth potential.”
“In stark contrast to traditional banks in France, which typically don’t offer spot financing, Finexkap has developed a flexible way of financing working capital for SMEs by allowing them to choose the invoices they wish to clear without any need to analyse the underlying assets.”
Short-term financing issues are reportedly responsible for more than 25% of corporate bankruptcies in France: one of the fastest growing markets for factoring services.
In the first half of 2014, GLI Finance saw the French factoring market grow by more than 15%, with access to working capital remaining a significant inhibitor to growth amongst the country’s SMEs.