Defacto tops up Series A with €10m extension

French fintech Defacto has secured an additional €10m as an extension of its Series A funding round.

The instant embedded lending platform, founded in 2021, provides short term loans to small and medium-sized businesses.

It has deployed more than €250m in small business financing over the past two years and says its average quote to capital time is less than 27 seconds.

Now it is looking to shift its focus towards personalised lending with proactive recommendations for small businesses regarding when to take on debt.

“Lack of access to working capital is the number one cause of small business bankruptcy in Europe. That’s why we built Defacto specifically for SMBs with speed and flexibility as our guiding principles,” Defactor co-founder and CEO Jordane Giuly said.

The funding round saw new investor Citi Ventures join existing investors Northzone, Headline and Global Founders Capital, and follows a €167m securitisation back in July.

Defacto plans to use the funds to strengthen its capabilities — specifically in its customer journey — and to expand its position in Europe, particularly in Germany, as it aims to be a European leader in B2B lending by 2025.

The company, which is an API-first product, attributes its success to its investment in AI modelling.

According to Defacto, it uses a diverse data set, including public, financial, historical and peripheral data to power its underwriting system, enabling quick and efficient lending decisions.

Integrating with more than 30 accounting, banking, fintech and treasury tools, it provides a “holistic source” of financial trends and risks to provide SMBs with tailored financial solutions.