Amsterdam-based Factris, a fintech startup that buys unpaid invoices from businesses, providing instant capital, recently closed a funding round with the private debt fund Dexteritas for €5M. Dexteritas is a Dutch private debt fund that offers flexible alternative financing to companies in the Netherlands.
This debt funding supplements the recent €50M senior debt facility provided by NNIP.
Use of the funds
According to Dexteritas, on recognising growth opportunities with Factris’s tech-driven approach to financing, it quickly embraced the opportunity to finance the fintech company. This new funding partner will enable Factris to further grow in volume, allowing them to offer their financing to even more businesses.
The raised capital will also enable Factris to support more factoring companies, acquire loan portfolios, and free up trapped investment capital, propelling them forward to become one of the biggest working-capital providers to SMEs in the EU.
Understanding Factris’ solution
Founded in 2017 and currently led by CEO Brian Reaves, Factris is on a mission to provide quick, low-cost working capital to European SMEs through financial technology with personalised guidance.
For example, risk is a significant problem faced by small businesses. When a business factors unpaid invoices, they sell it to a factoring company for a specific fee and the latter provides them with quick capital.
Factoring is a financial transaction and a type of debtor finance in which a business sells its accounts receivable (i.e., invoices) to a third party (called a factor) at a discount. A business will sometimes factor its receivable assets to meet its present and immediate cash needs.
However, this funding involves risk and this is where Factris aims to make this issue a thing of the past. This is what attracted Dexteritas to Factris – its high liquidity and secure financing..
Instead of relying on humans to slowly and incompletely understand the risk involved, Factris uses Artificial Intelligence and has automated the process to quickly and accurately assess the risk of a financial case, thus allowing them to fund more SMEs while also preventing financial loss.
Factris’ CEO Brian Reaves sees this as a major step towards helping struggling SMEs, who have been hit especially hard during the COVID-19 pandemic. Reaves comments, “Factris has always been focused on helping SMEs. As the pandemic drags on, so does its detrimental effects on small businesses. But thanks to the funding from Dexteritas, we can help finance even more SMEs in these challenging times.”
Dexteritas is a private debt fund that offers flexible alternative financing to Dutch companies. With a focus on medium-sized companies, Dexteritas offers tailor-made solutions for growth financing.
In September 2020, the company raised €50M in debt financing from AB ventures, the corporate venture capital arm of the Arab Bank. Existing investors including Speedinvest, Optima Investments, and other high net worth investors also participated in the Series-A equity funding round. In the same month, the company also bagged €5M to expand its operations and business reach.
Prior to that in March 2020, the fintech startup received €1.4M in funding from the EU for the development of an automated risk-management system. And, in November 2018, Factris raised €1.4M in its Seed round of funding from Speedinvest.
In January 2019, Factris acquired Lithuanian firm “Debifo” for an undisclosed amount with an aim to become the biggest company in accounts financing and services.