Liberis, the U.K.-based fintech that provides finance for small businesses as an alternative to a traditional bank loan or extended overdraft, has replenished its own coffers with £70 million in funding. The round is a mixture of debt and venture debt, although the company is declining to disclose the percentage split, so we can likely chalk this up as mostly debt to fund the loans Liberis issues.
Providing the financing are previous backers British Business Investments, Paragon Bank and BCI Europe, along with new partner Silicon Valley Bank (SVB). It brings the total funding raised by Liberis to £200 million, including more than £50 million in equity funding. “The new funds will be used to fuel company growth, launch new products and markets, and provide additional customer financing solutions,” says the fintech.
To date, 2007-founded Liberis has provided over £500 million in financing to 16,000 SMEs across Europe, the U.S. and the U.K. (the product is available in five new countries: U.S., Finland, Sweden, Czech Republic and Slovakia). However, lending has really picked up lately, with £250 million lent in the past two years alone.
Liberis provides SMEs with funding from £1,000 to £300,000 based on projected credit and debit card sales. However, the clever part is that the loan is paid back via a pre-agreed percentage of the business’ digital transactions. In other words, bar any minimum monthly payment agreed, the repayment schedule is directly tied to the size and pace of a business’ card transactions.
Noteworthy, the go-to-market strategy has shifted toward B2B2B -- or “embedded finance” -- with Liberis now predominantly partnering with marketplaces, software providers and acquirers, such as Worldpay from FIS and Global Payments. These partners integrate with Liberis to offer personalised pre-approved revenue-based financing to their end customers.
“Liberis’ core business is to enable partners to offer embedded business finance to their customers,” Rob Straathof, CEO of Liberis, tells TechCrunch. “Back in 2015, we launched one of the world’s first embedded business finance partnerships with Worldpay from FIS, and have significantly expanded our partnerships across the globe over the past years, including Global Payments, Opayo (Sagepay), EPOS Now and Worldpay U.S.”
Straathof says that by integrating Liberis’ business finance platform into a partner’s existing ecosystem and customer experience, the fintech is able to provide “instant value” for its partners and the SMEs they support.
“Through our single API integration, we receive privileged data from our partners which enables Liberis to offer hyper-personalised and pre-approved finance to SMEs,” he explains. “By making finance more personalised, intuitive and accessible for SMEs, we in turn empower our partners to unlock greater customer value by improving engagement, satisfaction and loyalty which lowers churn. Ultimately, everyone wins”.
Comments Folake Shasanya, SVB’s head of EMEA warehouse financing: “We are pleased to become a new funding partner to Liberis and have been impressed with their ability to embed financing solutions across technology platforms, payments providers and more. At SVB, supporting innovation is in our DNA and we are delighted to provide this global growth opportunity to Liberis through our warehouse and venture debt products”.
Article updated to clarify the round is a mixture of debt and venture debt, without any pure equity funding.