Incomlend, a Singapore-headquartered startup that operates a trading platform to connect exporters and importers with investors, has raised $20 million in a new financing round, it said on Tuesday.
Sequoia India, the India and SEA investment arm of the storied U.S.-headquartered venture firm, led the Series A round in four-year-old Incomlend. The CMA CGM Group, one of the world’s largest shipping and logistics firms, also participated in the round.
Incomlend’s invoice trading platform is solving three pain points. Exporters typically get paid weeks or months after shipping goods and lack working capital to move to service other orders until they have received their due. Incomlend says its platform employs AI-powered underwriting technology to enable exporters to receive early payment.
Similarly, the startup says importers on its platform are able to minimize the risk of supply chain disruption and set more favorable payment terms. And investors have found a new alternative asset class to invest in through Incomlend that offers returns in shorter durations.
These roadblocks have prompted traditional banks to pull back from financing such deals, creating a cash crunch among cross-border trading firms worldwide. “This has led to a $1.5 trillion trade finance gap, hitting mid-cap companies hard. This gap has worsened with Covid-19,” the startup said, citing its own research.
“The impact is acute in high-growth Asia where SMEs — which account for more than 95% of all businesses and provide two out of three private-sector jobs in the region — need more financing options to meet their growing demand. Further, low-interest rates in Asia — and negative rates in Europe — are prompting many global investors to seek alternative asset classes,” the startup said.
Morgan Terigi, co-founder and chief executive of Incomlend, said the startup’s trading platform is able to onboard clients and process deals in a more timely fashion with higher flexibility. Incomlend has facilitated more than $330 million in financing and covered invoice finance trades across 50 countries to date.
“The massive trade finance gap, combined with declining global interest rates and the high credit quality of Incomlend’s customers, has helped them create a compelling business that helps solve one of the most important challenges faced by global SMEs,” said Abheek Anand, managing director at Sequoia Capital India, in a statement.
Terigi said the startup will deploy the fresh capital to expand into Europe, Southeast Asia and North Asia and bulk up its technology stack.