Lending Startup Fundbox Raises $17.5M From Khosla To Help SMBs Improve Cash Flow
Fundbox, a startup that helps SMBs improve cash flow from clients, has raised $17.5 million in funding led by Khosla Ventures with SV Angel, Vikram Pandit, former CEO of Citigroup; Tom Glocer …
Context & Ripple Effects
Fundbox enters a small-business lending market in which online merchant lender Kabbage had already attracted a $17 million investment round in 2011. Fundbox’s Khosla-led $17.5 million round puts another well-capitalized provider behind the same broad problem: businesses waiting for customer payments.
First-order effects
- Fundbox gains $17.5 million to develop and offer its cash-flow product to SMBs, with Khosla Ventures leading the investor group.
Second-order effects
- Kabbage and Fundbox must compete for SMB borrowers and investor attention on the strength of how directly their products relieve working-capital pressure.
Third-order effects
- Multiple sizable rounds for online SMB lenders point toward working-capital finance becoming a software-led competitive category rather than a service dominated solely by incumbent banks.
The trend: Venture funding is backing online lenders that target the cash-flow gap created when small businesses wait to be paid.