Another London-headquartered fintech startup, albeit one with a development and marketing team in Spain, has raised more capital of its own. This time it’s the turn of Kantox. The currency exchange marketplace for SMEs right up to ‘mid cap’ companies has raised $11 million in Series B funding.
Leading the round is Partech Ventures, and IDinvest Partners, while Cabiedes & Partners also participated. All three are existing backers and the new investment brings total funding to $19 million.
Founded in 2011 by former Deloitte employee Philippe Gelis, Kantox offers a marketplace for businesses to exchange currency, including peer-to-peer, thus enabling them to get a significantly better exchange rate than that offered by the banks or traditional brokers.
“Large companies have resources, knowledge and leverage to manage their FX in a smart way and to negotiate fair prices with banks. On the contrary, SMEs and mid-caps are unable to do so and find themselves at the mercy of banks and traditional FX brokers,” says Gelis when asked to explain the problem his startup solves.
“At Kantox, we provide a transparent FX management platform which helps SMEs and mid-caps manage their FX the same way that a large corporate does, but without the risk of being charged extortionate rates.”
To that end, the startup claims 1,500 or so corporate clients, ranging from small businesses to mid-cap companies with revenues in the billions, including a number of publicly-listed companies. They span 18 industries, including technology, pharmaceutical, electronics, tourism, transport and even fast-growing startups.
Meanwhile, earlier this year Kantox reached the landmark of $1 billion worth of transactions processed on its platform since launch, with an additional $0.5 billion completed in the last three months alone. This included its largest transaction to date — a pretty impressive and cool $33.65 million.
One the topic of competitors, Gelis cites “banks, banks and banks,” noting that most of Kantox’s clients were previously using a bank to exchange currencies. “Banks still own 99 per cent of the market, so our main challenge is to educate clients and to get them out of the unfair banking system. It is a long-term goal, but we are here for the long-run,” he adds.
With that said, there are a plethora of FX startups, many of whom also attempt to undercut incumbents with better technology and by employing a so-called P2P model that aims to bypass the traditional currency exchange market. They include the heavily funded TransferWise, and much smaller player TransferGo, amongst many others.