Spotcap, the Rocket Internet-founded fintech startup that operates an online lending platform for small businesses, has beefed up its coffers with €31.5 million in new funding.
The round, which is the company’s third in 18 months, having previously raised €18 million, is being led by Russian private equity firm, Finstar Financial Group, with participation from previous investor Holtzbrinck Ventures.
Berlin-headquartered Spotcap says it plans to use the additional capital for further international expansion — it currently lends in Spain, the Netherlands, and Australia — while in a call CEO and co-founder Toby Triebel told me the cash will also be used to improve the service’s UX and provide more liquidity on the platform. Online lending is a cash-intensive business after all.
Claiming to use technology to bring a high level of automation to the lending process, Triebel says that Spotcap works with small businesses of all kinds, both online and brick ‘n’ mortar, to provide flexible financing, such as retailers that don’t have the required cash flow to buy extra stock in preparation for peak seasons or construction companies that have high upfront costs.
That startup’s credit scoring technology plugs into a business’ accounting software and bank account, and uses thousands of data points to accept or decline a loan or credit line, typically lasting over 12 months.
In some ways, it’s similar to London-based Iwoca, which uses data from an applicant’s Amazon Marketplace or Ebay seller accounts, but Spotcap isn’t just targeting e-retailers.
That, says Triebel, in part reflects Spotcap’s Continental Europe focus, specifically citing Spain, where ecommerce isn’t nearly as popular as, say, the U.K.
Given that there are increasing whispers that startups are going to or are already facing a more challenging funding environment, I ask the Spotcap CEO if today’s fairly hefty fundraising, so soon after its A round, is a case of stockpiling cash before a potential winter comes.
He laughs before replying: “Not at all”.
Unlike the Valley, Continental Europe is a few years behind, says Triebel, noting that there are very few large fintech companies in the region for bullish investors to put their money in to and that demand for this round was high, including significant interest from the U.S.