There is a clear pattern in B2B FinTech investment. Recent years saw a surge in funding for alternative finance players, as a gap in access to traditional bank loans paved the way for AltFin to make its splash. While the alternative lending hype has dulled a bit, it’s been replaced by a far greater hype-machine: blockchain.
This week’s venture capital (VC) investment tracker finds that both blockchain and alternative finance are leading markets. Though a $4 billion initial coin offering (ICO) from one blockchain startup has certainly turned heads, the investment is overshadowed by some analysts’ doubts in the company — and in the blockchain hype overall.
That’s why alternative finance has stolen the spotlight this week, with more than $100 million raised for industry players. It’s not even close to that $4 billion ICO, but has greater significance with some investors as alternative finance continues to build up its reputation for legitimacy.
Based in Seattle, Qumulo offers businesses data management technology via its cloud-based file storage solution. The company secured $93 million in Series D funding announced this week, with BlackRock Private Equity Partners leading the investment. Goldman Sachs and Western Digital also participated in the round, reports said, as did existing backers that include Highland Capital Partners, Kleiner, Perkins, Caufield & Byers, Madrona Venture Group and Valhalla Partners. In an interview with GeekWire about the funding, Qumulo President and CEO Bill Richter said the funds will support the company’s expansion efforts, noting that the funding could allow the company to not have to seek venture capital again.
Another startup in the data management space, Devo, secured $25 million in Series C funding this week with Insight Venture Partners leading the way — while Kibo Ventures also participated. Formerly known as Logtrust, Devo announced the investment coinciding with its rebrand. The company services global financial services, manufacturing, retail and telecommunications firms with data management solutions to make their operations more efficient. The new funds will be used for increased research and development, sales and marketing investments, the company said in a press release.
A $65 million in Series B funding for Paxos is just one of several high-value backings for blockchain startups this week. Paxos provides settlement services in the precious metals securities trading market. With the funds, which were led by Liberty City Ventures, RRE Ventures and others, the company said it plans to focus on settlement risk mitigation and expand product offerings into new markets, according to CCN reports.
In what has become a record-setter, blockchain startup Block.one, based in the Cayman Islands, has reportedly raised $4 billion as of Thursday (June 7). Reports in CNBC said this is the largest initial public offerings (IPO) of the year, with Block.one raising the massive funds via ICO. The company plans to release its flagship product, a blockchain platform dubbed EOSIO. Though the fundraising is impressive, reports highlighted the fact that Block.one has yet to release its product, and investors have not been notified exactly how the funds will be used by the company.
Alternative finance, once again, made a splash this week as BlueVine announced $60 million in equity funding from Menlo Ventures. The Series E funds will go toward further expansion of the company’s invoice factoring and business line of credit products, as well as towards exploration of new business financing products. BlueVine also noted in a press release that it plans to focus on research and development hiring. New investors — including SVB Capital,as well as its list of existing backers — also participated in the investment.
Operating in both California and India, Crowdera provides nonprofits a way to raise funds via crowdfunding on its platform. The solution offers these entities donation buttons, donation widgets for their websites, campaign services, donation management and other tools. This week the company said it secured Pre-Series Funding from an array of investors, including Angel Investors from Singapore, backers in California, Silicon Valley startup attorney Anil Advani and others. Crowdera told reporters that it plans to use the investment to focus on early-stage growth and product enhancement, according to BWDisrupt reports.
Another alternative lending startup, Lendix, announced $37 million in funding, according to TechCrunch reports this week. The French company enables individual investors in France, Spain and Italy to lend money to businesses in the three markets. And, with the new funds, Lendix said it is looking to expand geographically, with a particular focus in the Netherlands and Germany. Idinvest Partners and Allianz led the investment round, reports said, while CIR SpA and existing backers also participated, including Par Technology, CNP Assurances, Decaux Frères Investissements and Matmut.
Though not a lending platform itself, Germany’s FinCompare enables corporate borrowers to compare financing options through a single portal. In some cases, the company said in a press release this week, FinCompare connects those companies to loans, leasing, factoring and other financing products from banks and other alternative financial service providers. The company announced $11.8 million in Series A funding, led by ING Ventures while Speedinvest and UNIQA Ventures also participated, according to the announcement. FinCompare said it will use the investment to focus on tea expansion and IT.
Systum, based in California, targets small and medium-sized businesses (SMBs) with its cloud-based operations platform. The company announced $7.5 million in Series A funding in support of its offering led by Underscore VC, while Hearst Ventures also participated. A press release from Systum noted that the funds will be used for sales and marketing expansion. The company focuses its operating system on SMBs that need to manage eCommerce and B2B wholesale distribution operations, including inventory and order management, financial data management and sales. System noted its tool serves as both CRM and CMS for small businesses.
California’s Raken has a specific focus in mind for its B2B technology: construction. The firm offers reporting and field management tools, and an app for players in the construction industry. This week, the company announced $10 million in Series A funding in support of the technology. U.S. Venture Partners led the round, with participation from Tao Capital Partners and existing backers Eniac Ventures, Rincon Venture Partners and Spider Capital. Raken will deploy the funds to focus on expanding its product line and developing new field management workflows for the construction space, an announcement said.