An alternative lending holding company by the name of eProdigy has secured $100m in funding from an undisclosed private equity firm.
eProdigy’s sits across a number of disruptive lending, technology-based subsidiaries. The outfit’s services include: merchant cash advance, small business loans, ACH processing, a funding/lending servicing platform, an automated underwriting engine and a full CRM solution.
The company aims to cover every necessary aspect in the complex process of SME-facing alternative lending. eProdigy boasts 7 different subsidiary firms, offering everything from technology-based underwriting and servicing platforms to merchant cash advance. eProdigy began as life as Founder of the starter ACH Program and was an early-mover in the Merchant Cash Advance space. For those that aren’t aware, ACH stands for Automated Clearing House – an electronic network for processing financial transactions in the US.
The newly secured funding facility comes in the form of a term loan, a convertible note and participation rights. The $20m convertible facility may be turned to equity at a valuation of $100m.
David Rubin, CEO of eProdigy, commented:
"This deal changes our entire playbook. Previously, we were only able to focus on making merchant cash advances to higher risk merchants. Thanks to this new facility and our lower cost of capital, we'll be able to target A and B credit borrowers, offer a broader range of products, and provide more competitive terms and rates."
For the last 3 or 4 years, the bulk of eProdigy’s energies have been channeled into developing its cutting edge technology platforms. Mr. Rubin’s quote appears to suggest that eProdigy’s lending activities will be the primary beneficiaries of the $100m funding injection.
Stephen Brown, CFO of eProdigy, summarised:
"This agreement evidences that eProdigy has achieved significant intrinsic value by building state-of-the-art technology combined with a top-line operational team that can enable us to continue reinventing the alternative financing industry and point the way forward for it."