Nowadays, credit cards have become universal for customer transactions, and it is not difficult to see why. By intermediating payments, networks like Visa enable buyers and sellers to trade money for goods and services without understanding the financial risk profile of the counter-party.
Instead of applying for credit at every retailer you shop at, you should apply once at your issuing company, and then can buy with every retailer on the network. It is the easy formula that decreasing friction means more sales, and therefore more profits.
Payment scenario in the B2B industry
Yet for all the variation in the consumer side of the economy, there has been an astonishingly insufficient amount of innovation in the B2B world. Payments within businesses are still handled through invoices, with net payment terms that can surpass 90 days and with limited knowledge of the financial risk of the counter-parties.
There is no FICO rate for business as there is with consumers; neither is there a system that can intermediate the transactions and lessen their friction.
That is where Fundbox comes in.
How Fundbox is planning to influence B2B payments
The SF-headquartered startup wants to change B2B payments. This company aims to build a Visa-like payments network that permits businesses to transact with each other without having to know counter-party risk and also getting everyone paid quicker.
It is a concept that has drawn the attention of venture capital.
More about Fundbox’s funding
The company, which was established in 2013, announced that it had raised $176 million in a Series C equity financing. This is headed by a consortium of funders, including Allianz X, Healthcare of Ontario Pension Plan, HarbourVest and a litany of others.
Current supporters like Khosla, General Catalyst, and Spark Capital Growth are also associated. With this latest round of capital, the company’s entire equity funding reaches upwards of $300 million.
The CEO of Fundbox Eyal Shinar stated that an advantage in this fundraise was to choose supporters who not only could invest in equity, but also had big balance sheets. And also who could increase the company’s underwriting ability as it scales.
The company now has 240 employees scattered across SF, Tel Aviv, and a recently started office in Dallas. Shinar states that he wants to utilize the new funds to double and triple down on everything that is working.
SEE ALSO: 75F raises $18 mn in a round led by Bill Gates, Bloomberg, Bezos-backed alliance
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