Fintech Fundbox Inc. has raised $176 million in a new funding round from investors including Allianz SE and General Catalyst. The company plans to announce the funding on Tuesday, along with a new $150 million credit facility.
A Fundbox spokesman said the new round valued the company at between $500 million and $1 billion, but would not disclose the exact valuation.
The San Francisco-based startup is both a lender and a payments processor for small businesses. It uses artificial intelligence to assess the creditworthiness of potential borrowers, collecting data from other software and services used by the business, as well as their bank accounts.
The platform also facilitates quick payments to the borrower’s suppliers. “We are focused on unlocking the working capital that’s tied up in unpaid invoices," Chief Operating Officer Prashant Fuloria said. By using Fundbox, “the seller gets paid right away," he added.
Fundbox plans to use the fresh funding to hire employees in its engineering team and to expand the number of platforms it works with. The company will use the credit facility to lend directly to customers, Fuloria said.
The business-to-business fintech lending industry has piqued the interest of entrepreneurs and investors in recent months. Other players include fast-growing Brex Inc., which offers quick credit decisions and credit cards for startups, also using non-traditional metrics. Square Inc., too, lends money to its small-business customers.
“There will always be competition where people flood the same customers,” said Joseph Engelhart, chief investment officer of Allianz X, the insurer’s investment arm. “What we like is the underlying technology where we think they still have an edge in extending credit to the right people.”
Investors in Fundbox’s latest round include Allianz, Hamilton Lane and Synchrony Financial. It also saw participation from existing VCs including Khosla Ventures and Spark Capital Growth. The company declined to disclose which investors provided the credit facility. Amazon CEO Jeff Bezos and celebrity venture capitalist Ashton Kutcher are also investors in the company, but did not participate in the most recent round. The startup has raised $300 million in funding so far.
