The investment will enable Crowdz to expand its ability to bring accessible working capital to small businesses
Small and mid-sized enterprise (SME) finance platform Crowdz has secured $10 million in investment, led by Citi and Global Cleantech Capital, with participation from Bold Capital Partners, TFX Capital, and Augment Ventures.
Citi’s investment was led by the Spread Products Investment Technologies (SPRINT) team, the strategic investing arm of the bank’s industry-leading Global Spread Products division. Existing investor Global Cleantech Capital, a Netherlands-based growth venture capital firm, joined Citi in leading the round. Existing investors Bold Capital Partners, TFX Ventures, and Augment Ventures also participated, bringing Crowdz’s total capital raised to $25.5 million.
The capital will be used to fund Crowdz’s global expansion to meet its target of providing 25,000 SMEs with over $1B in working capital in 2023.
The current state of the supply chain cycle for SMEs is overwhelmingly defined by fragmentation and delays, inefficiencies which cost them over $3 trillion annually. Crowdz integrates with SMEs’ accounting, payment processing, and banking systems to allow SMEs to get paid early at competitive rates.
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The innovative platform includes proprietary risk scoring that gives banks, financial institutions, and DeFi lenders access to attractive risk-adjusted, diversified returns, while helping to plug the SME finance gap.
Crowdz and Citi plan to collaborate to give small and medium enterprises (SMEs) rapid and efficient access to the working capital needed to keep their businesses running. In addition, Citi and Crowdz intend to grow recurring revenue finance as an asset class, with a particular focus on SaaS businesses, and expand its ability to help SMEs unlock cash flow through receivable financing. Citi has a longstanding commitment to expanding access to capital and inclusive financial services. Through its $200 million Impact Fund, Citi deploys its own capital to make equity investments in “double bottom line” US-based private sector companies that are applying innovative solutions to help address some of society’s most pressing challenges.
Through their investment, Citi joins a growing list of high-profile corporate entities partnered with Crowdz, including Meta (formerly Facebook) and EG Funds Management. Meta has committed $100 million to financing diverse-owned businesses in the U.S. EG Funds, an Australian fund manager with $5.1 billion under management, is currently setting up a white label in the Asia Pacific. Additionally, a number of clients utilize a white-labelled iteration of the Crowdz platform to provide access to working capital for SMEs that impact and power everyday communities, from family-owned businesses to up-and-coming startups across the U.S. and Europe.
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Payson E. Johnston, CEO and co-founder of Crowdz, said: “Crowdz’s planned collaboration with Citi, paired with this investment from our partners, including Global Cleantech Capital, signifies a new phase of growth for the company, which will allow us to expand working capital access for SMEs. We share Citi’s view of recurring revenue as having the potential to become a new asset class, and Crowdz’s technology—including a global receivables marketplace with risk scoring, white label for enterprises and banks, and creation of digital assets—will help enable additional investment in this area.”
Katya Chupryna, Director, Citi SPRINT, said: “While we have been extremely impressed with Crowdz’s traction in the traditional invoice receivables financing space, we are particularly excited about the burgeoning asset class of SaaS receivables. Only a small fraction of the $170 billion in yearly SaaS revenues are currently represented in financial products, indicating a massive opportunity for expansion. Through accretive synergies between Crowdz’s innovative technological solutions and Citi, the leading global bank, we see the potential to meaningfully develop SaaS receivables as an asset class.”
Sandeep Arora, Citi Institutional Clients Group’s Head of Digital and Chief Investment Officer, added: “Citi and Crowdz are both focused on creating new opportunities for SME clients and improving client experiences. Crowdz has built an impressive digital approach to provide efficient access to working capital. Digitization creates momentum, new opportunities for clients, and ultimately, the best user experiences. We’re excited to join this journey with Crowdz and support their continued growth.”
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