Greensill Capital, a UK-based supply chain financing startup, has secured an additional $655 million from SoftBank’s technology-focused Vision Fund, per a press release.
The latest capital injection values the company at just shy of $4 billion, per CityAM, and follows Softbank’s $800 million investment in the firm earlier this year, when it was valued at $3.5 billion. This investment is in the form of convertible loan notes that will be switched to primary and secondary shares over time, reports Reuters citing a source close to the startup.
Greensill has earmarked the latest tranche of capital for the expansion of its fast-growing business:
- Greensill will use some of its fresh capital to expand the geographies it operates in and further invest in its technology. It’s already become a key player in the niche business of supply chain financing, unlocking more than $150 billion of financing to over 8 million suppliers and clients in 2019 alone. This success has partially been driven by its vast reach: It provides solutions in 165 countries. Greensill’s decision to use this latest investment for expansion and tech investment therefore makes sense, and follows its recent announcement that it would be accelerating its expansion in Brazil and moving into new countries including China and India.
It’ll also use part of the capital to expand into tangential business lines via acquisitions. As part of the funding news, Greensill announced that it reached an agreement to acquire UK-based FreeUp, which allows employees to access earned wages that they’ve yet to receive. The FreeUp acquisition, which would mark its first move into the consumer segment, is a natural next step, according to Lex Greensill, because “there is effectively no difference between our firm making an early invoice payment and making an early salary payment,” per the press release. Following the acquisition, Greensill plans to pilot a new product immediately, with a full launch expected to come within the next few months.
Expanding into the consumer segment can help Greensill double down on its early success — but also turn up the heat on the payday segment. The payday space has been struggling in the UK recently: QuickQuid, the country’s largest payday lender, collapsed into administration on Friday.
A number of others also shuttered following a regulatory crackdown that restricted how much they could charge customers. Greensill’s tie-up with FreeUp is likely another nail in the coffin for the struggling industry. For Greensill, though, there’s a substantial opportunity for it to tap into the large market these players are leaving behind. However, it needs to ensure British consumers are not only aware of its product but also of how it differs from payday loans, if it wants its push into the retail segment to be successful.
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