Liberis, the UK-based fintech company that funds small businesses as an alternative to a traditional bank loan or extended overdraft, has topped up its own coffers with £ 70 million. The round is a mix of equity and debt, though the company refuses to disclose the percentage breakdown so we can probably refer to this as primarily debt to fund the Liberis-issued loans.
Funding is provided by previous supporters such as British Business Investments, Paragon Bank and BCI Europe, as well as new partner Silicon Valley Bank (SVB). It brings the total funding from Liberis to £ 200m including equity financing of over £ 50m. "The new funds will be used to stimulate company growth, introduce new products and markets, and provide additional customer financing solutions," says Fintech.
To date, Liberis, founded in 2007, has funded 16,000 SMEs in Europe, the US and the UK with over £ 500 million (the product is available in five new countries: US, Finland, Sweden, Czech Republic and Slovakia). However, lending has increased dramatically recently. In the past two years alone, £ 250 million has been lent.
Liberis offers SMB funding between £ 1,000 and £ 300,000 based on planned sales of credit and debit cards. The smart part, however, is that the loan is repaid via a pre-agreed percentage of the company's digital transactions. In other words, aside from an agreed monthly minimum payment, the repayment schedule is directly tied to the size and pace of a company's card transactions.
Remarkably, the market launch strategy has shifted in the direction of B2B2B – or "Embedded Finance" – with Liberis now working primarily with marketplaces, software providers and acquirers such as Worldpay from FIS and Global Payments. These partners integrate with Liberis to offer their end customers personalized, pre-approved, revenue-based financing.
"Liberis' core business is to enable partners to offer their customers embedded business finance," said Rob Straathof, CEO of Liberis, to TechCrunch. "In 2015, we launched one of the world's first embedded business finance partnerships with Worldpay from FIS and have expanded our partnerships significantly over the past few years, including Global Payments, Opayo (Sagepay), EPOS Now and Worldpay USA."
According to Straathof, by integrating Liberis' business finance platform with a partner's existing ecosystem and customer experience, fintech can offer its partners and the SMEs they support "instant value".
“Our single API integration gives us privileged data from our partners that enables Liberis to offer hyper-personalized and pre-approved finance to SMEs,” he explains. “By making financing more personalized, intuitive and accessible for SMBs, we in turn enable our partners to achieve greater customer value by increasing engagement, satisfaction and loyalty, which lowers churn. Ultimately everyone wins ”.
Folake Shasanya, SVB's Head of EMB Inventory Financing, said: “We are excited to become a new financing partner for Liberis and have been impressed with their ability to embed financing solutions across technology platforms, payment providers and more. At SVB, supporting innovation is in our DNA and we are excited to offer Liberis this global growth opportunity through our inventory and risk credit products. "