Fundbox CEO On Landing Growth Capital, And Fixing The Net Terms Economy

The U.S. economy is reopening bit by bit, and consumer-facing Main Street small- to medium-sized businesses (SMBs) wait with bated breath to see if top lines and cash flows will return.

Stimulus payments have helped, perhaps just a bit, but looking beyond the pandemic, SMBs operating in the B2B space must confront the challenge of slow payments. The “net terms” economy hurts SMBs, and during economic downturns, buyers stretch out payments. It’s a $3.1 trillion problem in the U.S. — that’s the amount estimated by Fundbox and PYMNTS to be tied up in receivables on any given day as buyers take 30, 60, 90 or more days to pay.

Fundbox, which offers credit and invoice financing, said Tuesday (May 26) that it had received a fresh equity investment from MUFG Innovation Partners Co. Ltd., the corporate venture capital arm of Mitsubishi UFJ Financial Group.

With the latest financing, MUFG Innovation Partners tripled its investment in Fundbox’s Series C round announced in September 2019, bringing the total equity funding in the round to almost $200 million.

In an interview with Karen Webster, Eyal Shinar, founder and CEO, said the investment comes as Fundbox has seen rising demand for its offerings, including a doubling in demand for Fundbox Pay. Fundbox Pay is a payment and credit solution focused on SMB B2B transactions in the U.S. launched a bit more than two years ago. Read more…

A campaign to get clients to pay small businesses faster

Small businesses need money right now to keep their doors open. Yes, federal and state aid will be critical. But it also would be a huge and immediate help to just be paid by clients for work they’ve already completed.
Fundbox, a business-to-business payments processor and small business lender, estimates that on any given day there is $900 billion owed to small businesses with fewer than 100 employees.
One business owner told CNN Business his cash reserves would increase by a month if he just got paid for the jobs his firm has already finished. Typically, small business clients make final payments 30 days or more after a job is done.
That’s why Fundbox and other companies serving small businesses launched a campaign called #paytoday to encourage big companies and government agencies to accelerate their payments to small business vendors. Read more…

Fintech startup Fundbox, which lends money to small businesses, signaled on Tuesday its intention to go public by naming its first finance chief officer, a crucial hire for late-stage private companies preparing for an eventual IPO.

The San Francisco-based Fundbox, which frees up cash flow by extending a credit line to small companies against unpaid invoices, named Marten Abrahamsen CFO effective January 3. Abrahamsen joins Fundbox, which extends loans from between $10,000 and $100,000, from The Chernin Group,  an investment firm that specializes in tech businesses, among other sectors.

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For Eyal Shinar, CEO of Fundbox, understanding the burden that cash-flow bottlenecks and delayed invoice payments have on B2B companies came through personal experience.

His mother, who owned a small staffing business, regularly faced cash-flow constraints as business clients would wait months to pay for staffing services provided. The business grew quickly, but high growth means higher costs. With corporate customers extending days sales outstanding (DSO) for the business, finances were tough.

“She had a revolving line of credit, but it wasn’t enough,” Shinar told PYMNTS’ Karen Webster in a recent Masterclass Video interview. “She just grew too fast to make payments. On paper, the business was doing very well, but in reality, she didn’t have enough cash.”

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Organic mattress manufacturer OMI has teamed with Fundbox to offer 60-day, interest-free financing on purchases with a maximum of $100,000 in order to offer a new business credit platform.

OMI said the offering tackles one of the largest barriers to entry for merchants that have wanted to offer floor organic products for a long time but were discouraged because of the costs, Furniture Today reported.

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San Francisco, CA, Oct. 16, 2019 (GLOBE NEWSWIRE) — Goldman Sachs (NYSE:GS) is recognizing Eyal Shinar, the founder and CEO of Fundbox as one of the 100 Most Intriguing Entrepreneurs of 2019 at its Builders + Innovators Summit in Santa Barbara, California. This is the third time that Goldman Sachs has recognized Shinar for his entrepreneurial accomplishments.

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Fintech Fundbox Inc. has raised $176 million in a new funding round from investors including Allianz SE and General Catalyst. The company plans to announce the funding on Tuesday, along with a new $150 million credit facility.

A Fundbox spokesman said the new round valued the company at between $500 million and $1 billion, but would not disclose the exact valuation.

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Call it the $3.1 trillion problem — or the $3.1 trillion gridlock.

As reported by PYMNTS just last month, in collaboration with Fundbox via The Trade Credit Dilemma Report, as much as $3.1 trillion net is owed in accounts receivable for U.S. firms across any given day. It’s inefficient at best, a growth killer at worst.

San Francisco, CA, June 04, 2019 (GLOBE NEWSWIRE) —

San Francisco, CA, June 4, 2019 – Today, Fundbox, a leading Fintech company dedicated to simplifying the way businesses pay and get paid, announced that the company was selected by Red Herring, a global media company as a winner of its Top 100 North America 2019 event, recognizing the continent’s most exciting and innovative private technology companies.