NoviCap, the invoice trading marketplace headquartered in London but with offices in Barcelona and a customer base largely in Spain, has closed a $1.7 million seed round. Backers include Partech Ventures, Techstars Ventures and Cabiedes & Partners.
Launched in 2014, the Barclays Techstars alumni solves the problem SMEs face due to the typical 60-90 day delay in invoices being paid by large clients, thus creating unnecessarily cash-flow problems.
Similar to U.K. competitor MarketInvoice, NoviCap provides a marketplace where SMEs can raise financing by trading their invoices, which are essentially used as security, for much speedier financing.
Investors — family offices, high-net-worth and corporate investors — who ‘buy’ those invoices are offered a discount, while NoviCap takes a small commission on each transaction. The startup also pitches its marketplace as anther way for investors to diversify their portfolios.
NoviCap says it’s decision to target Southern Europe and Spain in particular is because Spanish companies typically face the longest payment terms in Europe. The startup also says that aside from geography it differs from the much-better funded MarketInvoice by offering a “fairer and more transparent approach to risk and pricing”.
“NoviCap´s focus on technology and automation allows to provide a tailored discount rate specific to each invoice. The risk analysis and pricing structure are based on the SME, the debtor (SME´s client) and their credit history. This pricing strategy enables NoviCap to assign fairer prices based on the specific risk level of each individual debtor,” a spokesperson for the company tells TechCrunch.
Meanwhile, NoviCap’s founders draw heavily from the Rocket Internet talent machine. CEO Federico Travella is a former Managing Director at Rocket Internet in Southeast Asia, and COO Marc Antoni Macià is a former Director of Business Intelligence and Strategy at Rocket Internet’s Westwing and founder of Palila. The startup’s other founder is CTO Nicolas Overloop, who is said to be the first engineer at Geckoboard and brings experience in building online marketplaces.