Banking News

Barclays leads $5.5m funding for trade finance blockchain startup Crowdz

SME trade finance

Yesterday Silicon Valley-based Crowdz announced its $5.5 million Series A funding round led by Barclays and BOLD Capital Partners. TFX Capital Partners, Techstars Ventures, and First Derivatives also participated in the round. Crowdz has an Invoice Exchange where SMEs can auction invoices to get trade financing from banks or hedge fund managers.

The Invoice Exchange has a B2B payment gateway, and in addition to offering trade finance, it enables matching of orders with invoices and payments which provides increased confidence for funders.

“While companies of all sizes can benefit greatly from our global Invoice Exchange, we founded Crowdz with the goal of ensuring that all small and midsize enterprises (SMEs) in particular have access to the cashflow they need in order to survive and grow,” said Payson Johnston, co-founder and CEO of Crowdz.

“Unfortunately, millions of these companies — which account for 75% of global B2B commerce and which need invoice financing the most — have long been excluded from the market. We are pleased to have Barclays and Bold as our strategic partners as we accelerate this journey.”

The startup has multiple solutions. Apart from the Invoice Exchange it offers eBay-like B2B marketplaces for apparel, furniture and electronics. However, these appear to be in test mode.

“Crowdz is pushing the boundaries of B2B payments with its revolutionary Invoice Exchange,” adds John Stecher, Chief Technology and Innovation Officer, Barclays. “Our team is excited to see them enter this next phase of growth, and look forward to supporting them further as they work to disrupt the payments industry, providing a superior service to our customers and clients.”​

The startup is a graduate of two accelerators, Barclays Techstars and 500 Startups.

Technology-wise Crowdz uses Ethereum, but interoperates with other networks using Overledger. Last year Johnston commented: “We have needed a solution that allows for invoices and other documents to be transferred from one blockchain to another — for example, among Hyperledger, Corda, and EOS. With the Overledger solution from Quant Network, it is now possible to pass data among different blockchains.”

While Crowdz is carving out a distinctive market position, the sector is already “crowded” with startups. Goldman Sachs backed Tradeshift is also looking at launching an invoice marketplace. It’s already a substantial company, so its advantage is the data gleaned from its existing supply chain financing solution. Centrifuge has a similar goal.

Additionally, we.trade the joint venture company backed by 13 major banks, is targeting the SME sector. However, instead of a marketplace, it provides a solution that the banks offer to SME customers each with their own terms.