- Finverity’s scalable Supply Chain Finance platform for underserved emerging markets attracts international venture capital investors.
- Trade Finance digitalisation still behind the curve compared to other financial sectors.
- Total industry revenues for supply chain finance forecast to post a compound annual growth rate of 3.2% to reach $11 billion in 2030
3 February 2022 – London. Finverity, the mid-market supply chain finance platform focused on emerging markets, today announces the completion of a USD 2m Pre-Series A equity funding round. The proceeds will be deployed in expanding the sales, operations and technology teams to support Finverity’s rapid growth.
Finverity has attracted investment in this round from two main types of investors: specialist fintech and emerging markets investors. Investors in the round include MENA-based B&Y Venture Partners (a leading MENA venture capital fund with strong regional backers including Mubadala Ventures), and Canadian-based Loyal VC (an existing investor in Finverity operating a global start-up index fund with over 200 investments across 50+ countries), an emerging market family office and a number of strategic angel investors.
Finverity has been growing strongly thanks to its fully digital operations, the increasing need from corporates for working capital solutions to aid post-pandemic recovery and an influx of investors into this alternative asset class searching for yield. Following a number of recent senior hires, Finverity is further expanding its sales and business development team to service a growing customer pipeline, its operations team to support rapidly increasing transaction volumes and its technology team to accelerate product development. In 2022 Finverity is planning to open three new offices across MENA and Eastern Europe.
Post-Covid, the global trade finance gap has grown to US$1.7trn. The trade finance gap reflects the shortfall between the amount of trade finance currently being provided and global trade financing needs. Finverity is addressing this gap by focusing on the supply chain finance (SCF) needs of emerging market companies, which make up the largest and most under-served part of the gap, and channelling capital flows to this geographical segment. The appeal of SCF, which lets suppliers get paid quickly while improving buyers’ cash flow, means that total industry revenues for supply chain finance are forecast to post a compound annual growth rate of 3.2% to reach $11 billion in 2030, according to Boston Consulting Group.
Viacheslav (Slava) Oganezov, CEO & co-founder of Finverity, commented:
“The healthy functioning of supply chain finance is pivotal in aiding recovery post-pandemic by keeping the wheels of the global economy turning. By efficiently providing working capital to buyers and suppliers around the world, SCF platforms such as Finverity’s are reshaping the way companies and funders interact within trade finance. We are thrilled to share this vision with our new and existing shareholders and look forward to growing together.”
Finverity’s platform is a complete SCF ecosystem for funders and corporates to transact with one another. The platform provides high-quality deal origination, analysis and structuring alongside matching such mid-market SCF deals with funder mandates (both bank and non-bank). In addition, the platform offers a suite of risk mitigation capabilities and automated transaction servicing to enhance operational efficiency and make the process of investing in SCF assets truly scalable.
Alex Fenechiu, COO & co-founder of Finverity, commented:
“We’ve always been astounded at the gap between companies’ working capital requirements and the quality of provision offered in the market. The strong demand for Finverity’s offering has confirmed the vast opportunity set when it comes to improving supply chain finance origination and transaction processes.”
As an asset class, SCF in emerging markets can potentially generate high single-digit returns. These returns are coupled with low global default rates (impairments were registered on less than 0.3% of all common trade finance transactions globally in 2020), and low correlation to traditional markets. The ease of access to quality SCF deals and reduced operating costs available via Finverity’s platform means this niche asset class is now becoming available to a much wider group of non-bank investors active in private credit, who were attracted by its risk-return profile but struggled to participate effectively. Finverity’s platform also supports smaller and mid-sized banks seeking a wider range of funding opportunities. This levels the playing field with the big banks that have historically dominated this sector.
Ghaith Yafi, Managing Partner, B&Y Venture Partners, commented:
“The financing needs of emerging market mid-market corporates have been significantly under-served for far too long. We see this every day among many MENA-based corporates. Finverity’s platform is already showing strong scalability in meeting this demand in the MENA region and beyond. We’re delighted to be participating in this financing round and supporting the exceptional Finverity team”.
Kamal Hassan, fund manager at Loyal VC, commented:
“As a very early investor in Finverity, our pilot and subsequent proof and scale up stage investments were continually validated by management’s knowledge of supply chain finance and their strategy of how best to address the opportunity set. It is now clear that they are also capable of excellent execution. Finverity is becoming a true leader in its sector and Loyal VC is delighted to be making a follow-on investment at this exciting stage in its development.”
Finverity was born out of a vision to make the global financial system work for all, one product at a time. The company is on a mission to bridge the $1.7trn global trade finance gap by channelling capital to where it’s most needed: mid-market companies in emerging markets, which make up the bulk of the gap. Finverity’s award-winning Supply Chain Finance (SCF) technology platform caters to the entire ecosystem of Trade Finance participants and is made available via 3 routes:
- A digital marketplace that directly matches bank and non-bank funders with pre-qualified mid-market companies seeking supply chain and receivables finance. The platform provides a seamless transaction servicing infrastructure.
- A highly customisable, white-label software for banks and non-bank funders looking to increase their supply chain and receivables finance operations.
- A servicing offering enabling funders to onboard, distribute and manage their own transactions and co-fund new transactions using Finverity’s open platform.
Backed by venture capital, Finverity is growing rapidly and building a world-class team to capitalise on the digitalisation trends in trade finance, the increasing need for working capital solutions from corporates to aid post-pandemic recovery and an influx of investors searching for yield in this alternative asset class.
Visit Finverity today to find out how we are innovating in the realm of SCF.
About B&Y Venture Partners
Founded by a team of former entrepreneurs with a successful track record of building and exiting companies, BY Venture Partners (BY) is a venture capital firm headquartered in Abu Dhabi investing globally with a focus on the MENA region. Over the past few years, BY has been investing early stage at Seed, Series A & B in some of the best performing tech companies globally with a thesis to bridge the MENA ecosystem with more mature western markets such as the UK and US. Through the unique access and strong global network of its management team, BY’s goal is to help MENA start-ups go global and the best international companies to expand in the MENA region.
About Loyal VC
Loyal VC operates a global start-up index fund with over 200 investments across more than 50 countries. The fund is designed to minimise systemic bias inherent in the investment process, unlocking greater returns. The Loyal Start-up Index Fund has delivered strong returns since its launch in 2018, thanks to its collaborative, staged investment process, its network of over 500 advisors, and its global relationships with the Founder Institute, the world’s pre-seed accelerator, and INSEAD, rated the #1 non-US business school for unicorn founders by Pitchbook. The fund’s portfolio is diversified across a number of dimensions: ~30% of the portfolio have a woman CEO, ~25% are from emerging markets, and around 80% address one or more of the UN’s Sustainable Development Goals (SDGs).