Defacto secures €15m led by Northzone with Headline and GFC to become Europe’s largest API-first B2B lending platform

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PARIS–(BUSINESS WIRE)–Founded in June 2021 by Jordane Giuly, the former co-founder of Spendesk (the expense management platform recently valued at more than 1.5 billion euros), Morgan O’hana and Marc-Henri Gires, Defacto provides transparent and instant financing to small and medium-sized enterprises (SMEs).

The €15m Series A round, led by new investor Northzone (FinTech backer Klarna,) includes backers Headline and Global Founders Capital from Defacto, and angel notes from Thibaud Elzière (founder of ‘eFounders), Rodolphe Ardant (founder and CEO of Spendesk), Didier Valet (former deputy CEO of Société Générale) and Victoria van lennep (founder of Lendable).

Built with a “Capital by API, no paperwork” mindset

Defacto provides loans and credits to SMEs through its integrated financing platform. Its API-based product enables third parties such as marketplaces, e-commerce platforms and others to integrate its products directly into their own products, integrating seamlessly.

Its technology-driven approach focuses on providing access to working capital to SMEs, a segment underserved by traditional players, especially in today’s unfavorable macro-economic environment.

“Cash and access to cash is once again cause for concern due to inflation, government covid loan repayments and rising interest rates. A study by EY estimates that in France alone, more than 40,000 companies will go bankrupt. It was 28,000 in 2021,” adds co-founder Morgan O’hana. “We are building a product for builders, not bankers. Access to capital must be fair and instantaneous. Banks rely on data that is at least 18 months old and then take 4 months or more to process loan applications.

Since its launch in France, Defacto has forged partnerships with more than 15 major B2B marketplaces, FinTech companies and e-commerce companies. It has distributed more than €30 million in short-term loans to SMEs via partners such as the freelance platform Malt or fintechs such as Agicap or Pennylane.

Frederic Tan, Product Director at Malt: “We decided to work with Defacto for its flexibility, the quality of its API, and the integration experience. They have been a great ally in our challenge to offer an even more pleasant and transparent payment experience for our customers and freelancers. The team is always available and responsive: a pleasure to work with!”

Instant Access for SMBs

“Companies are increasingly interacting with digital platforms. These interactions generate a large amount of real-time data, which Defacto leverages to redefine how underwriting should be done. Banking institutions will never have adequate information systems to process this flow of alternative data, to offer real-time and tailor-made loan offers,” says Marc-Henri Gires, co-founder and CTO of Defacto.

“Jordane, Morgan and Marco are building an incredibly exciting proposition in the B2B space, a category where they are poised to become a leader. B2B commerce is significantly larger than B2C commerce and most solutions for buyers and The explosion of SME platforms will create significant opportunities over the next few years and we believe Defacto has the potential to be at the forefront of these market developments. Kilian Pender, a Northzone partner joining the Defacto board.

Thanks to a new loan capacity of €400 million, Defacto is now deploying its solution in Germany, the Netherlands, Belgium and Spain. “Finance must move towards real-time data and processes. Small and medium-sized enterprises represent 99% of all European businesses. Yet traditional banking is increasingly timid in supporting them. Defacto’s Capital by API provides entrepreneurs with forms of credit that not only adapt to their needs, but are also more fair and transparent. It is an engine of growth. Rarely have I encountered a team so customer-focused and achieving so much in a single year,” comments Jonathan Userovici, Partner at Headline and lead at Defacto.

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