- Berlin-based Banxware has raised $11.3 million in fresh funding as it looks to expand its product.
- The embedded finance startup provides capital to small businesses through credit.
- The seed round extension brings Banxware’s total funding raised to $20 million.
A fintech that delivers working capital to small and medium businesses through credit has raised $11.3 million in fresh funds.
Embedded finance startup Banxware, which was founded in 2020, has developed a platform that enables the likes of marketplaces and aggregators to offer loans to their customers. The Berlin-based “lending-as-a-service” startup secured the funds in a seed extension.
“What we saw is a need for small merchants to get
liquidity
in order to grow, particularly through corona,” Miriam Wohlfarth, Banxware’s cofounder, told Insider.
“E-commerce is growing but young companies, especially those under two years old don’t get bank loans and use pre-paid credit cards and other products but that’s a lot of effort for liquidity.”
Wohlfarth, previously the founder of buy now, pay later startup Ratepay, added that improved regulation like Europe’s
open banking
directive PSD2 and real-time credit scoring has helped Banxware attract customers.
The company offers loans of between €3,000 ($3,400) and €50,000 ($57,000) with risk-based pricing and repayments based on customer revenues. Banxware wants to use the funding to grow out its product suite as the size of its clients increases with loans of up to €200,000 ($267,000) expected later down the line.
New investors in the round included FinVC, Element Ventures, D4 Ventures, and Varengold Bank AG. They were joined by the company’s existing investors including Force over Mass, VR Ventures, and HTGF.
Banxware works with companies like German business banking startup Penta, Takeaway.com, and more recently German payments company Payone.
Banxware is itself not a bank but rather offers its revenue-based financing through a direct integration with a German savings bank. The funding, taking Banxware to $20 million raised to date, will go towards increasing headcount to around 70 people by the end of the year.
“Customer demand has changed to become ‘Amazonized,'” Wohlfarth added. “They want a frictionless process and they have gotten used to it. We want to grow internationally and not just be a German company but a European champion in embedded lending.”
Check out Banxware’s pitch deck below:
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