Singapore-based trade finance startup Incomlend has raised $20 million in its Series A round led by Sequoia India, according to a statement.
The round also saw the participation of CMA CGM Group, one of the world’s largest container transportation and shipping companies.
Incomlend operates an invoice trading platform, which connects exporters and importers with investors. Exporters are paid early for supplied goods and services, while importers get to extend payment terms. Investors, on the other hand, gain access to a new alternative asset class by participating in this exchange.
The firm aims to bridge the $1.5 trillion trade finance gap, brought about by a credit crunch faced by many cross-border trading companies around the world. According to 2019 report by ADB, over 40 per cent of trade finance applications by small and medium enterprises (SMEs) are rejected by banks. This financing gap continues to widen with the rise of compliance costs due to Basel I and II regulations.
In the meantime, SMEs represent a significant majority of Asia’s businesses. Some 95 per cent of all businesses are SMEs providing some two out of three private-sector jobs in the region.
“Incomlend’s mission is to increase financial inclusion on non-recourse basis for companies of all sizes across the globe while offering investors real alternatives non-correlated to financial markets to existing asset classes” said Morgan Terigi, CEO and co-founder of Incomlend.
“Incomlend’s technology platform is bringing much needed financial innovation to the backbone of global trade. 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, Sequoia Capital (India) Singapore.
The freshly raised capital will be used to drive Incomlend’s expansion into Europe, Southeast Asia and North Asia, while advancing the development of its invoice product. It will also focus on increasing the funded volumes of trade receivables. To date, Incomlend has facilitated over $330 million in financing and covered invoice finance trades across 50 countries.