Funding Xchange, one of the original three mandated referral platforms, has raised £1.5m.
There’s life in the government referral scheme yet. Funding Xchange, one of a handful of platforms designated by HM Treasury to refer businesses declined credit by the banks to other sources of funding, has closed a £1.5m series A round.
The round was led by Calibrate Management Ltd and Kimera. The money will be used to continue the development of Funding Xchange’s automated decisioning technology, as well as for the incorporation of live transactional data sources. The latter of these strategies is expected to drive greater speed and automation, thus driving down costs for funding providers on the platform.
In a release announcing the fundraise, Funding Xchange said it is working to harness Open Banking and cloud accounting data to enable “one-click” funding applications to a range of finance providers.
“We are delighted to welcome Calibrate and Kimera as investors in Funding Xchange. They share our vision for re-shaping the future of lending for small businesses,” said Katrin Herrling, co-founder and CEO of Funding Xchange.
“The SME finance landscape is changing rapidly – regulatory reform, open banking and innovation from lenders are all helping to create transparency and are enabling small businesses to take control of their finances. The role of Funding Xchange in this changing eco-system is to provide solutions that help SMEs to grow, by accessing the best finance terms that are available to them.”
First switched on in November 2016, the mandatory bank referral scheme has so far underwhelmed. An update from the Treasury in August of last year revealed that less than £4m had been delivered to small businesses via the scheme up until that point.
Funding Xchange is one of four firms designated by the Treasury to boost those numbers. Alongside it are Funding Options, BizFiTech and Alternative Business Funding.