Enter FundBox, an alternative lending startup that's trying to fix this problem by doling out advances to small businesses on invoices of anywhere from $100 to $25,000. And now, Fundbox has raised a little money of its own--a $40 million Series B round led by General Catalyst Partners, to be exact--which will help expand its service in the increasingly competitive world of alternative lending.
The Fundbox team. CEO Eyal Shinar is sixth from the left. But unlike these competitors, Fundbox aims to address a more narrow and immediate need, says co-founder and CEO Eyal Shinar, and that is, paying business owners for the work they've already done. It was inspired, in large part, by Shinar's mother, who ran her own staffing company in Israel and would sometimes struggle with the lag time between doing the work and getting paid. "It's your money," Shinar says. "It's just about getting paid now versus in 60 or 90 days."
How It Works
Fundbox integrates directly with a business's accounting software, allowing them to upload all their outstanding invoices at once. It takes a matter of hours for the first invoice to get approved, during which Fundbox's algorithms try to filter out fraudsters and determine whether or not the business is healthy enough to actually repay the advance. They look for a range of triggers that an invoice, or a business, might be fake, like whether or not the IP address, computer, and where the accounting software is registered all match.
The Fundbox dashboard. [img]http://www.wired.com/wp-content/themes/Phoenix/assets/images/gallery-illo@2x.png"/>Fundbox[img]http://cdn2.business2community.com/wp-content/uploads/2013/01/Content-marketing-trendsetters-vision.jpg[/img]
To build these algorithms, Fundbox's engineers drew from their experience serving as Israeli intelligence agents in Unit 8200. "Let's just say tracing bad intentions related to fraud isn't very different than tracing someone who's trying to blow up a building,[/img]http://www.wired.com/2015/03/fundbox/
http://www.youtube.com/watch?v=Oe72owFr3lc
