Financial technology company Fundbox, which automates advance payments to small businesses based on their outstanding invoices, announced today it has raised $50 million in an equity funding round led by a new investor, Spark Capital Growth.
San Francisco-based Fundbox bills its service as a solution for a common problem among small businesses—a cash flow crunch. They’re owed money by customers, but they have to wait to be paid.
Fundbox offers to advance the amount on an outstanding invoice for a three-month period. Clients repay Fundbox in installments over the 12-week period, along with a “clearing fee.” Small businesses can tap an instant advance by clicking on an invoice when they have Fundbox’s software integrated with their accounting systems.
Fundbox sets the amount of the clearing fee based on its analysis of data on the risk associated with the small business client itself, as well as the specific customer that owes it money on the invoice.
According to the calculator on Fundbox’s website, a client would pay $52 to $72 for a $1,000 advance. In other words, the small business would pay Fundbox 5.2 percent to 7.2 percent of the base amount of $1,000 for an advance of three months. If the client repays early, part of the clearing fee is waived.
Joining Spark Capital Growth in the $50 million round were Bezos Expeditions, Sound Ventures, and Entrée Capital. Also participating were existing investors Khosla Ventures, General Catalyst Partners, Shlomo Kramer, and Blumberg Capital. Those existing investors joined in Fundbox’s $40 million Series B funding round in March.
The round announced today brings Fundbox’s total fundraising to $107.5 million.
Fundbox intends to use the new capital to drive growth and product development. The company, founded in 2012, says its revenues have been growing substantially for seven consecutive quarters.
“The strong market demand for our product, coupled with the interest from the investment community, highlights that Fundbox is solving one of the most significant problems faced by the 29 million small businesses nationwide,” said Fundbox CEO Eyal Shinar in a statement today about the equity funding round.
