Paris-based Defacto raises €15M led by Northzone; plans expansion

Paris-based Defacto, an API-based B2B lending platform, announced on Tuesday that it has raised €15M in a funding round led by Northzone.

Defacto’s existing investors Headline and Global Founders Capital also participated in the round. 

Defacto provides instant financing to small and medium enterprises (SMEs). The company says the current round will increase its lending capacity by €400M.

Angel investors Thibaud Elziere, founder of eFounders; Rodolphe Ardant, founder and CEO of Spendesk; Didier Valet, former deputy CEO at Societe Generale; and Victoris van Iennep, founder of Lendable also participated in the round.

Kilian Pender, partner at Northzone, will join Defacto’s board of directors.

Providing instant loans to SMEs

Founded in June, 2021, by Jordane Giuly, Morgan O’hana and Marc-Henri Gires, Defacto claims to provide instant and seamless financing to SMEs. With the API-first approach, Defacto aims to reduce the lending time for SMEs. 

The company’s API-based product also enables third parties such as marketplaces, eCommerce platforms and others to embed its products directly in their own products. Defacto claims to have built partnerships with over 15 lending B2B marketplaces, Fintech companies and e-commerce businesses.

Co-founder Morgan O’hana says, “Cash flow and access to liquidity are once again reasons for concern due to inflation, repayment of state covid loan and rising interest rates. Traditional banking caters less to SMEs and processes are too slow. An EY study estimates that in France alone, over 40.000 businesses will fail. It was 28.000 in 2021.”

“We are building a product for builders, not bankers. Access to capital should be fair and instant. Banks rely on data that is at least 18 months old and then take 4 months or longer to process loan applications. We move in real-time,” she adds.

Defacto is also planning to expand its business to Germany, Netherlands, Belgium, and Spain. The company currently has a team of 13 members.

The investors

Founded in 1996, Northzone is an early-stage venture capital fund with over $1.7B in assets under management. The VC has hubs in New York, London and Stockholm.

Northzone has raised nine funds to date and has invested in more than 150 companies, including Spotify, iZettle, Avito, Kahoot!, Hopin, Klarna, and Trustpilot.

Kilian Pender says, “Jordane, Morgan, and Marco are building an incredibly exciting proposition within the B2B space, a category where they are poised to become a leader. B2B commerce is significantly larger than B2C commerce and most of the solutions for buyers and sellers around checkout financing have been lacking technology-led thinking. The explosion of SME platforms will create significant opportunity over the coming years and Defacto we believe has the potential to be at the forefront of these market developments.”

Headline, formerly e.ventures, is a Venture Capital firm with a presence in 7 cities around the world. The firm invests across geographies, leading rounds at every stage. Sonos, Creditas, Farfetch, Segment, and Bumble are some of the companies the VC backed.

Global Founders Capital has supported over 500 companies in the last 20 years, including Facebook, Linkedin, Ankorstore, HelloFresh, Slack, Revolut, and Canva.