Wowsers! Fundbox wants to streamline a 12 trillion dollar B2B (e)invoicing market.

Fundbox acts as a microlender for small businesses that cannot afford to wait for money from clients that can often take up to 90 days to arrive. Fundbox identified this as an underserved space, in that banks tend to be reluctant to lend to small businesses, particularly in small amounts.

Fundbox says that the business-to-business invoice area is worth $74 trillion, a much bigger market than the $3 trillion business-to-consumer one that includes competitors like Visa, Paypal and Square.

Fundbox claims to have been operating in a stealth mode while signing up thousands of businesses for its service and already handling tens of thousands of invoices per day.

How Fundbox works

Business owners can directly connect accounting software to Fundbox to request microloans and track payments.

Behind the scenes at Fundbox is a system that calculates the likelihood of a business defaulting on a payment, combining behavioral analysis, finance theory and big data. This allows Fundbox to calculate the necessary fees on its short-term loans.

Once a loan is given for the invoice, the business can pay it back in installments or all at once without a penalty. The system also takes into account the frequency with which a business uses Fundbox and the reliability of its payments.

Fundbox founder and CEO Eyal Shinar:

  • “We’ve identified an unprecedented opportunity to bring data-driven innovation to a critically underserved and broken market, focused initially on allowing small businesses to immediately clear outstanding invoices and improve cash flow by accelerating payments,”

David Weiden, partner at Khosla Ventures:

  • “Every small business wishes for convenient access to capital at a fair price, but for most, that is just wishful thinking,”
  • “Fundbox leverages newly available cloud services and deep data science to deliver financial services that simply were not possible before, and that’s the kind of innovation that can really build a great company.”

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