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Israeli-founded firm Fundbox becomes unicorn with fresh $100m investment

Fintech company, based in California, focuses on financial services and tools for small businesses

Ricky Ben-David is The Times of Israel’s Startups and Business editor and reporter.

An illustrative photo of payment processing. (Mikhail Nilov from Pexels)
An illustrative photo of payment processing. (Mikhail Nilov from Pexels)

US-based financial tech company Fundbox, founded by Israeli entrepreneurs, became Israel’s latest unicorn this week, announcing a fresh funding round of $100 million on Tuesday at a valuation of over $1 billion.

The investment was led by Healthcare of Ontario Pension Plan (HOOPP), a benefit pension plan for the Canadian province’s hospital and community-based healthcare sector, and joined by existing investors Allianz X, the investment unit of German fintech multinational Allianze Group, US venture capital firm Khosla Ventures, and The Private Shares Fund.

Founded in 2013 by fintech veterans Eyal Shinar, Tomer Michaeli, and Yuval Ariav, Fundbox offers small-business owners data-driven loans to solve cash flow issues through an AI-powered platform that assesses risks and potential capital tied up in unpaid invoices. It says it advances payment for thousands of unpaid invoices weekly, eliminating the 30-, 60-, and 90-day payment flow issues faced by many small businesses.

The company is based in San Francisco and opened an office in Dallas in 2019. Fundbox also has an office in Tel Aviv.

Fundbox said in a company announcement Tuesday that it has surpassed $2.5 billion in transaction volume in nine years, brought in $100 million in annual revenue run rate this year, partly due to a pandemic-related boost, and grew its customer base by over 200%.

The company recently launched a new “buy now, pay later” payment tool, Flex Pay, for companies to manage business expenses and said it was working on a new product designed for entrepreneurs with multiple small businesses, and new businesses that lack the financial history to access capital through traditional means and for which it offers lines of credit of up to $150,000.

“Fundbox is primed for continued growth as we approach a once-in-a-decade opportunity to drive the recovery and expansion of the small business economy,” said Fundbox CEO Prashant Fuloria, who was appointed last year when Shinar took on the role of executive chairman. Fuloria previously worked at Yahoo, Facebook, and Google.

Fundbox is not yet profitable but Fuloria indicated that its $1 billion valuation was balanced.

“This valuation leaves room for increase and growth. I know that there are companies with five times our revenue that receive the value of a unicorn but in their place I wouldn’t feel certain that the direction of the markets can change. We are strong. We weren’t destroyed in 2020 and most important is where we will be in five or ten years,” he told Globes.

Fundbox was recently named to CB Insights’ Fintech 250 list, which recognizes emerging private companies working on groundbreaking financial technology.

The company operates in a competitive field where fintech companies vie for small- and medium-sized business (SMB) customers. Some notable Israeli companies in the sector include Melio, the developer of a payments platform geared toward US SMBs, and that was recently valued at $4 billion, and BlueVine, a California-based company providing banking and invoice payment services for SMBs.

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