It's hard to imagine a modern consumer transaction landscape without the presence of credit cards. The benefits for both consumers and businesses are obvious: credit card networks work as intermediaries, removing the need to apply for credit at every single merchant, lowering friction and boosting sales--and profits.
However, for all of the advancements in credit networks for consumer transactions, the B2B world remains largely unimproved compared to decades past. Invoicing is still the standard for resolving payments between businesses, and there's little to no information available to evaluate financial risk; after all, there's no FICO score equivalent for businesses and--until now--no system to act as an intermediary for these transactions.
However, San Francisco-based startup Fundbox hopes to change all of that. The company is aiming to overall the B2B payments industry by creating a payments network modeled after consumer credit cards that allows businesses to conduct transactions faster without having to individually investigate counter-party risk.
Fundbox's vision has drawn a lot of attention--and a lot of venture capital. The company announced this week the successful conclusion of its Series C funding round, in which it raised $176 million in new capital from a range of funders including Allianz X, HarbourVest and Healthcare for Ontario Pension Plan in addition to existing investors General Catalyst, Khosla and Spark Capital Growth. With this latest round, Fundbox brings its total equity funding to nearly $300 million. The company simultaneously announced that it has raised a $150 million credit facility to be used to underwrite its product.
For Fundbox founder and CEO Eyal Shinar, the success of this latest funding validates his company's goal of challenging the status quo in B2B transactions: "The status quo for B2B transactions is uncertain cash flow and antiquated payment systems, which stifles business growth. If you’re a business owner and don’t know when you’re getting paid next or whether you have the funds to complete a transaction, you lose valuable time and important business opportunities. The remedy to this uncertainty is the ability to facilitate quick risk decisions, faster payments, and more flexible terms so our customers have greater predictability related to their revenue and cash flow. This new investment round validates the market opportunity and that our team is on the right path as we continue to focus on transforming B2B commerce for the better.”