The U.K. company, which plays in the peer-to-peer lending space by enabling businesses to raise money from institutional investors and high net worth individuals by ‘selling’ outstanding invoices, has raised £5 million from VC Northzone, and Paul Forster.
The latter co-founded and was former CEO of Indeed.com, the job search engine that saw a successful exit in 2012. And — along with Northzone — is said to be taking an “active role” in helping the company scale its operations.
Hence today’s new funding, which is all about MarketInvoice stepping on the gas in a bid to continue a growth trajectory that has seen it trade nearly £300 million through the platform, with close to £200 million this year.
That growth, of course, is also riding the coattails of the U.K.’s recent banking crisis and their general reluctance to lend to small-to-medium sized businesses.
Most recently the British government stepped in via its British Business Bank initiative to invest £5 million through MarketInvoice’s platform (in addition to other P2P lenders), as part of a wider bid to pump liquidity into a otherwise stagnant credit market for SMEs. It’s a theme all of the U.K.’s alternative lenders are benefiting from.
To that end, the invoice finance industry is a pretty old one, but is often seen as an avenue only open to companies about to go to the wall. MarketInvoice wants to change this, as well as offer the benefits of speed and scale that come with moving the process online.
The way it works is that invoice buyers — such as hedge funds, asset managers, family Offices, and high net worth individuals — bid in a real-time auction to determine how much of an invoice’s value they will provide as capital, minus their cut. MarketInvoice itself then takes a slice of that cake, which is of course how the startup makes money.