The Israeli fintech company Fundbox is raising a lot, even though most of the money from previous fundraisers has not been used. The Corona crisis has created a serious crisis in the market in which the company operates and has led to layoffs and salary cuts in the company’s management and operations.
The Israeli fintech company Fundbox announced today (Tuesday) the completion of a $ 100 million round of funding. The fundraising round was led by HOOPP – the health insurance of the pension plan in Ontario, along with previous investors in the company: Alianz X, Khosla Ventures – the investment arm of the insurance group Alliance and The Private Shares Fund. New investors also took part in the round, including Arbor Waypoint Select Fund and BNY Mellon.
Bring one of the smart products in the consumer market – just for business
Fundbox’s system is designed for small and medium-sized businesses and is supposed to solve the ‘current plus’ problem we are all familiar with: on the one hand, there is the buyer, who wants to enjoy convenient payment terms, but on the other hand there is the seller who wants to get the money for his services. Moment, and has to deal with flexible late payments and a kind of uncertainty about his financial future, which does not necessarily allow him to develop.
Fundbox allows the seller (B2B) to receive immediate payment against an invoice, while providing flexible payment terms to the buyer, just like credit card payments. Among other things, the company uses an accurate forecasting system that knows how to give the seller a quick confirmation of the payment and its terms. The company has about 325,000 customers in the US, small and medium-sized businesses (SMBs), who pay a commission for the service.
The Israeli company is also introducing a new product with the announcement of the recruitment called Flex Pay, which will provide business owners with flexible payment options based on credit lines in the “Buy Now, Pay Later” model (or, BNPL). In addition, the company is expected to launch in 2022 a product for multiple business owners or new business owners who are having difficulty reaching traditional means of financing due to the lack of a sufficient financial history.
With the entry into the BNPL realm, Fundbox comes to market share that is today considered one of the hottest in the United States when it comes to the small citizen (with powerful players like Affirm, AfterPay and Swedish Clarena), who gets a flexible payment option for products and services – only accessible to business owners.
Fired, but now a significant increase is reported
Despite announcements about the recruitment and entry into the unicorn club, since the Corona Fundbox has gone through several upheavals. With the outbreak of the plague – which severely hurt the company’s market share, small and medium-sized businesses – Fundbox fired 15% of its employees and cut the salaries of the company’s executives. In addition, contrary to earlier plans, the company had to shelve its IPO plans in the meantime.
In conversation with Giktiim Company CEO Present Poloria – who took office in 2020 – says that despite the epidemic, the company has managed to remain a significant player in the market and that since then it has shown significant growth – reaching one of the most coveted targets last year – the $ 100 million ARR club. .
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Poloria – who last year replaced one of the founders and who currently serves as chairman of the board, Eyal Shinar – joined the company in 2016 and served in several positions, including COO and CPO, and eventually became chairman of the company. On the departure of Shinar, Poloria told us that “it was Eyal’s decision to transfer the reins… when he felt that society was in good hands.” By the way, Shinar is the last of the founders to make this move, when he was preceded by the other two founders, Yuval Ariav and Tomer Michaeli.
According to Poloria, most of the capital raised by the company in Round C – which included raising $ 326 million in 2019 and expanding it by another $ 20 million in 2020 – is still in the bank. The additional $ 100 million will help us invest in the company’s growth – by adding new customers, building new products and increasing the team. In addition, they will help us be prepared for any possible acquisition or merger in the future, ”Poloria said of the recruitment.
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