Factris, an Amsterdam-based fintech company, announced on Thursday that it has raised €10M through its partnership with NN Investment Partners (NN IP), a Goldman Sachs-owned asset manager specialising in fund management, fixed income strategies, and integrated client solutions.
The fintech startup says that the funds will be used to finance trade-related invoices for European SMEs.
Financing unpaid invoices for cash flow
Founded in 2017 by Brice Laurent and Marcel Meijer, Factris is on a mission to provide quick and affordable capital to SMEs across Europe using financial technology with personalised guidance.
Factoring, which is Factris’ primary form of financing, helps customers by providing working capital using their unpaid invoices.
Factoring is a financial transaction and 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.
Factris claims that this alternative form of financing has proven to be faster in sourcing the required cash flow to businesses when compared to the more traditional forms of financing, such as businesses applying for a bank loan.
According to a statement, Factris’ double-digit growth over the last year reflects the increased demand for invoice factoring from SMEs. For instance, the company claims that its portfolio grew by 41 per cent in 2022 compared to 2021, and over 32 per cent more customers than the year before.
The war in Ukraine and the ongoing COVID-19 outbreak, both of which are posing enormous financial challenges to SMBs across the EU, are contributing to the rise in demand for finance.
Funds for expansion in Europe
Factris claims that it is already the largest alternative factoring company in the Netherlands. And with the raised capital, it has begun steadily expanding into the other European markets.
The company’s services are currently offered in five EU countries after entering Poland and Belgium in Q1 of 2022.
Factris CEO Brian Reaves, says, “With all of the problems European SMEs face, Factris is proud to be part of the solution. Thanks to more funding, we can increase capacity and offer alternative financing to new markets and more businesses – all to help sustain and grow EU businesses.”