Since the start of the COVID-19 pandemic, Silicon Valley startup Crowdz has grown its SME customer base from 450 to 25,000. The Barclays backed company leverages blockchain to provide an SME invoice auction marketplace where banks can bid and provide trade finance. Its popularity is hardly surprising given the cash shortage triggered by the pandemic. On the upside, it does not bear the risks.
The company is about to launch in the UK and, in preparation, is participating in tests in the UK FCA regulatory sandbox.
Additionally, today the firm announced the launch of the Crowdz SMARTSCORE, a new risk assessment tool from Wiserfunding founded by NYU Stern professor Edward Altman. The Wiserfunding Z-Score model claims to have a 95% default prediction accuracy for companies with revenues from £500,000 to £200 million ($262 million).
“Since the start of the COVID-19 crisis, Crowdz has seen a 5000 per cent increase in business users globally. Partnering with Wiserfunding is expected to boost this figure significantly by enhancing the comprehensiveness of our SMARTSCORE,” said Crowdz CEO and founder Payson Johnston.
“As an addition to Crowdz SMARTSCORE, the introduction of Wiserfunding will help investors funding Crowdz’ SME community to better allocate funds, and help SMEs hardest hit by COVID-19, get back on their feet. More broadly, by increasing our capacity to fund more SMEs, this partnership makes the market more efficient, mitigates the risk of an SME credit bubble, and will help to rebuild the economy,” he said.
A year ago, the startup raised a $5.5 million Series A funding round led by Barclays and BOLD Capital Partners. It uses Ethereum blockchain technology with the Overledger solution from Quant Network, providing blockchain interoperability.
Another startup targeting SME trade finance is we.trade backed by numerous major banks.