C2FO Raises $200 Million On Its Path To Unicorn

C2FO, the Kansas City operator of a marketplace for working capital, raised $200 million in venture funding led by the SoftBank Vision Fund.

Earlier in August, C2FO announced the funding round, which also included participation from existing investors Temasek and Union Square Ventures. As part of the deal, Nahoko Hoshino of SoftBank will join the C2FO board.

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Using proprietary algorithms C2FO has created a marketplace to match accounts receivable and accounts payable so businesses can get early payments in real time. Cash flow has long been an issue for businesses, particularly small and medium-sized ones. It’s a leading reason many enterprises ultimately fail.

On the platform suppliers and buyers negotiate for early payment of invoices with payers receiving a discount. According to the company, more than 300,000 businesses across 173 countries utilize the platform. Since it’s first transaction nine years ago, it has generated more than $223 billion in working capital flow volume and more than 829 million days of accelerated payment. Some of CF2O customers include Costco, Wal-Mart, Ace Hardware, Dick's Sporting Goods.

“We are very fortunate to have a team who, for years, has delivered industry-leading unit economics, extraordinary customer satisfaction, and strong global growth,” said Sandy Kemper, C2FO Founder, and Chief Executive Officer when announcing the funding round. “Due to their work, we have now grown to match over $1.2 trillion of accounts receivable and accounts payable.” C2FO didn’t disclose its valuation after the funding round. It has landed on lists this year as one of the fintech companies that will reach unicorn staunch in 2019. That occurs when the valuation surpasses $1 billion.

In March the fintech company raised $100 million in what was the largest VC funding round for a Kansas City startup. That round was led by Allianz X of Munich and Abu Dhabi-based Mubadala Investment Company. It also included participation from Temasek, Union Square Ventures and Mithril Capital.

The $200 million investment in C2FO marks another bet on a supply chain fintech company for SoftBank’s $100 billion technology-focused fund. It already invested in supply chain financing company Greensill of the U.K. In a recent interview with Bloomberg, Akshay Naheta, a managing partner at the SoftBank Fund said business models are getting redefined and that banks aren’t leading the innovation. “That’s what keeps us excited about this sector,” the managing partner told Bloomberg.

In prepared remarks when the investment was announced Naheta said C2FO is providing a disruptive innovation to an industry that has long lacked alternatives to free up cash on the cheap.
“We believe the company’s platform provides maximum value for buyers and suppliers and are excited by the company’s vision to become the global exchange for working capital,” Naheta said. C2FO said it will use the proceeds to develop new markets to further improve access to working capital not just for large multinational corporations, but also small and medium-sized enterprises.