AltFi caught up with Spotcap CEO Toby Triebel to learn more about the fundraise.
Rocket Internet-founded global online lending platform Spotcap has announced the closure of a €34.4m investment round, led by international private equity firm Finstar Financial Group, with the participation from previous investor Holtzbrinck Ventures. The platform has unhelpfully declined to comment on whether the €31.5m is comprised of one of either, or both, debt and equity funding. We suspect it’s a mix.
Founded in September 2014 and headquartered in Berlin, Spotcap enables small business owners to grow their business by providing fast and flexible financing, and belongs to the small group of platforms that operate cross-border. The platform operates in Spain (since September 2014), the Netherlands (since March 2015) and Australia (since May 2015).
This is Spotcap’s third successful round of financing in 18 months. The online lender previously raised €13 million in funding from a group of investors, including the likes of Rocket Internet, Access Industries and Holtzbrinck Ventures, as well as €5 million in debt capital from Kreos Capital.
Spotcap intends to use the new capital injection to expand its operations globally and to finance its online business lending activities. Toby seemed enthusiastic about the involvement of the international private equity company Finstar Financial Group, which already holds a strong position in the global FinTech space.
“We are delighted with the endorsement and backing by Finstar. This long-term strategic partnership with a leading investor is a validation of Spotcap’s solid business model and our goal to become a leading global provider of online business loans. Finstar’s substantial expertise and valuable relationships in the FinTech industry will enable Spotcap to fast-track its growth.”
As AltFi will be hosting The AltFi Australasia Summit 2016 at the end of February in Sydney – which Spotcap is supporting as a sponsor. I asked the Spotcap boss for more details about his plans for the business down under. He explained:
"Spotcap addresses the financing needs of small businesses. Australia’s SMEs employ around 7 million Australians and produce almost 60% of private sector economic output. However, these businesses often struggle to get financing because of their size or lack of credit history. Spotcap is faster and more flexible than traditional lenders. Unlike banks, the application process is online and we can make a credit decision within minutes. Based on the information the client provides us with and the credit information we have, our algorithm computes quickly and impartially the clients’ score for a credit line."
On the competition front, Toby agreed on the importance of putting into perspective the fact that the big four banks enjoy a dominant market share in the Australian lending space, as Glenn Hodgeman recently noted. Consequently, he believes that rival platforms – i.e.: RateSetter Australia, ThinCats Australia, MoneyPlace and the like – should not be seen as direct rivals, since they are crucial to boosting market awareness.
Toby is convinced about the potential enormity of the Australian opportunity. Although small and medium enterprises employ around seven million Australians, produce more than half a trillion dollars in output and make up almost 100% of innovative businesses with expenditures of almost $6 billion each year on research and development, they are experiencing extreme difficulty in accessing new funds to expand their operations. Alternative finance platforms represent one method of making a dent in the funding gap.
"Australia is in the pole position to become a fintech hotspot. The country is very well equipped for significant fintech growth. Regulatory initatives and a supportive government strengthen the young industry. The UK already showed that these are significant markers for fintech success. With increasing awareness of new players, Australians will switch over to better retail UX in this market, and fintechs will develop sophistication beyond unbundling."
Toby concluded with a note on Spotcap’s technology. Spotcap operates with its wholly proprietary technology-base, defined by its boss as “the core strength of the company”. All of the platform’s processes – from business screening to money lending – are completely automated, allowing the platform to continuously monitor the financial health of its clients and to offer a high level of customer experience.