Fundbox, an online site that provides small businesses with the immediate cash they need to stay afloat, has closed on another $50 million in funding.
This new funding arrives less than six months after the alternative lending startup announced $40 million series B investment.
Spark Capital Growth led the new round of funding, bringing Fundbox’s venture funding total to $108 million in less than two years.
Participating in the new round of funding is Bezos Expeditions (the personal investment arm of Jeff Bezos), Entrée Capital, Ashton Kutcher and Guy Oseary’s Sound Ventures, and existing investors General Catalyst, Blumberg Capital, Shlomo Kramer and Khosla Ventures.
Fundbox provides loans to small business that run on invoices. The company pays the full amount of the invoice so that businesses don’t have to wait two to three months to get paid.
Unlike traditional lenders that rely on FICO scores and credit scores, Fundbox uses a company’s existing accounting software to assess each individual invoice. Fundbox’s algorithm is able to build a risk profile in real time by assessing the business in question, the market and the specific transaction.
Using the algorithm, Fundbox is able to make a funding decision in less than a minute and, if successful, deposits are made into the company’s account before the end of the next business day.
Businesses have up to 12 weeks to pay back the invoice amount, plus a flat monthly fee.
Eyal Shinar, founder and CEO, says most customers pay Fundbox as soon as they receive money from their clients. He added, Fundbox was seeing very low, single-digit default rates since businesses have an incentive to pay early because they pay lower fees.
In less than six months the company has been able to double its average invoice size from $5,000 to $10,000.
Shinar writes on the official Fundbox blog:
“This new round of investment will allow us to further invest in innovation and product development. We are also going to be expanding our team. If you have a passion for small business and are interested in joining us, please visit our jobs page.”
The company also says it is currently serving more than 20,000 small businesses and had processed more than 15 million invoices since its inception.