Sonovate, the UK’s leading finance and back-office tech provider to recruitment agencies and consultancies, has secured £110million debt and equity finance, led by M&G Investments, MXB Holdings Inc, Dawn Capital and Rocket Internet SE.
This latest round of investment follows Series B funding secured in October 2016, led by Global Founders Capital, the investment vehicle of Rocket Internet, and supported by Dawn Capital. Dawn also led Sonovate’s Series A funding round earlier that year.
Launched to challenge traditional invoice finance products on offer from the banks, Sonovate helps any business working with contingent workers to unlock their true growth potential.
As traditional lending has become increasingly lengthy and uncertain for SMEs since the 2008 financial crisis, Sonovate reduces this complexity and provides upfront funding against unpaid invoices. The company has funded almost £1 billion of invoices for recruitment agencies, consultancies and on-demand vendors since launching in 2012.
Richard Prime, Sonovate’s co-CEO, explains: “The world of work is changing rapidly with more and more highly skilled individuals deciding to work on a more contingent basis.
“But businesses working with contract workers, including recruitment agencies and consultancy businesses, must pay their contractors multiple times before receiving payment from their clients, typically 45 to 90 days later. This severely impacts cashflow and poses a huge risk to businesses - Sonovate removes this burden and risk altogether.
“We’re on an incredible journey, consistently doing what the banks say isn’t possible!”
This latest injection of capital into Sonovate will enable the company to advance its core product offering, reach into new international markets including Germany, the Netherlands and America and optimise finance for SME and mid-market businesses.
Kevin Haupert, Director at M&G Investments, says: “The experienced management team at Sonovate has a clear understanding of what companies in the recruitment and manpower sector require, resulting in an innovative offering fit for purpose for the digital age. This investment from our pension fund and institutional clients will enable Sonovate to expand its business, unlocking further much-needed capital to SMEs across the UK.”
Josh Bell, General Partner at Dawn Capital, comments: “Sonovate continues to provide game changing tech and finance options to the recruitment industry and contingent workspace. Its product set removes stress over payments, smooths cashflows and means firms can focus on adding value elsewhere, which is often what matters most. As a long-term investor in the company, we know there is huge potential for further growth ahead, particularly in entering new markets. This capital will play a vital role in helping the business to capture these opportunities.”
Michael Birch, co-founder of MXB Holdings and founder of several start-ups including Blab, BirthdayAlarm.com, Ringo.com, and social networking site, Bebo, states: “We’re excited to be part of Sonovate’s journey. Richard and Damon’s vision to make it a reality for people to get paid when they need to access funds resonates with our team. Sonovate’s product expansion plans are very exciting and creates huge opportunities for the contingent workspace.”
Prime concludes: “M&G has been at the forefront of providing financing to companies who were traditionally dependent on the banks prior to the financial crisis. This market has evolved and we now have pension funds and other institutional investors financing innovative funding platforms such as Sonovate, who are unlocking much needed cashflow for SMEs and mid-tier companies.
“Josh and the team at Dawn Capital have been instrumental in Sonovate’s growth to date and as a team of fintech experts, we are delighted to continue our partnership with the company. Michael and Xochi Birch are hugely successful entrepreneurs and investors in their own right. With their extensive experience in scaling businesses, it’s great that they can join our journey.”