New investors include London-based fintech specialist Outward, Amsterdam-based Acrobator Ventures and US-based s16vc founders fund with follow-on investments from MENA-based B&Y Venture Partners as well as a range of UHNWIs. The funding round comes on the back of 15x revenue growth in 2022 across the Middle East and Africa and the recent expansion to Eastern Europe.

Founded in 2017 by Viacheslav Oganezov and Alex Fenechiu, Finverity was borne out of a vision to make the global financial system work for all, one product at a time. Fast forward 5+ years and Finverity has built the world’s first truly digital ecosystem for trade and supply chain finance in pursuit of achieving its mission of bridging the $1.7trn global trade finance gap by channelling capital to where it’s most needed.

Finverity has a dual offering:

Funding Platform - brings together corporates seeking working capital and funders looking to deploy capital into quality mid-market assets on a single platform. The platform provides a whole suite of services and technology to enable trade and supply chain finance deals to be executed seamlessly and at scale;
Software as a Service solution - provides an end-to-end technology system for banks and non-banking financial institutions (NBFIs) to completely revolutionise their trade finance and working capital operations, client experience and risk capabilities.

The funding raised in this round will be used to immediately increase the headcount from the current 40 to 60 employees, to meet rapidly increasing demand for Finverity’s solutions and to complete office openings in Dubai, Poland and Kenya. Furthermore, Finverity’s technology is expanding to cover almost the entire range of funded trade finance and working capital products.

What is Supply Chain Finance (SCF)?

The multitude of terms used to describe SCF goes to show just how little standardisation exists across the globe. Seemingly innovative terms such as BNPL (Buy Now, Pay Later) are simply a different way of naming SCF. In essence, SCF is the financing of a time delay between the moment goods/services are ordered/shipped and the time they are actually paid for. In a simple example, if a farmer sells avocados to a local supermarket, they would probably get paid 60 days after supplying to the supermarket and issuing the invoice. SCF allows the supermarket to offer the farmer an early payment alternative at a fraction of the cost the farmer would otherwise incur if trying to finance that invoice themselves, in a very simple way. It boosts supply chain resilience, unlocks cash trapped in invoices and allows businesses to grow organically with predictable cash flows. Significantly more complex structures also exist within SCF and across trade finance and working capital products.

Why are SCF and Finverity of interest to investors now?

First, from a macro standpoint, the combination of rising interest rates, higher inflation and a dampened global macroeconomic outlook has made working capital a topic of C-suite discussions and is leading to a strong demand for trade finance solutions. Banks and financial institutions (FIs) are scrambling to meet the huge demand from a wide range of corporates as they are rarely equipped to do so quickly or effectively, especially given the increasing complexity of shifting supply chains and corporate business needs. This is where partnerships with fintechs such as Finverity come in handy. The continued digital transformation in trade finance globally places Finverity in a desirable sweet spot to meet burgeoning demand.

Second, Finverity has been built with zero code customisation in mind, which gives its offerings a serious competitive edge. Through its own funding platform, Finverity goes well beyond simply connecting corporates and funders. Managed by a specialist team, the platform provides deal origination (identifying corporates requiring funding), deal structuring, due diligence, matching corporates with funders based on their risk appetite and end-to-end processing. The provision of all these integrated services allows funders to focus on evaluating credit risk and significantly speeds up the scalability and speed of deal flow selection and processing. Zero code customisation offered by the platform enables Finverity to rapidly structure and roll out products that meet corporates’ needs, while embedding them into the operational processes of both corporate and funder. In 2022, Finverity originated over $500m of demand from corporate clients for its financing solutions.

Turning to its SaaS solution, Finverity offers banks and NBFIs an enterprise-level end-to-end system that can be deployed in under 21 days. This is in stark contrast to much longer deployment times in the industry, often exceeding 12 months. Integrated zero code customisation provides banks and NBFIs with immediate ability to rapidly roll out new trade finance and working capital products.

Third, the combination of favourable macro dynamics and cutting-edge offerings has been driving Finverity’s growth and enabled a range of partnerships with banks and finance providers. In 2022 Finverity launched partnerships with numerous banks’ trade finance desks including Investec, National Bank of Fujairah and FIMBank, focused on helping them scale their asset deployment by funding Finverity-originated transactions and digitalising trade finance operations using Finverity’s technology. As a result, partner banks can shorten their credit approval times, reduce their operational costs and fund much larger deal volumes without having to build out a huge internal team. This is leading to better overall client offerings and the ability to tap into completely new client segments.

Fourth, strong demand for trade and supply chain finance in emerging markets has well served Finverity’s focus on MENA and Africa, where the next 3 to 5 years point to a brighter macro-economic outlook compared to the Western economies and where demand remains largely unmet. GDP growth for Gulf Cooperation Council (GCC) countries is expected to more than double, reaching 6.5 percent in 2022, according to a recent IMF Policy Paper. This is due to surging commodity prices and the region’s political neutrality that limited the negative impact from the war in Ukraine. Meanwhile, demand for SCF in Africa continues to rise. An October 2022 IFC Market Assessment shows that in Kenya alone, the current market for supply chain finance (SCF) is worth approximately $24.8 billion. This represents a key opportunity for financial institutions to reach SMEs in a range of value chains. SMEs account for 42% of demand, while current SCF supply meets only 7-10% of total demand.

Alex Fenechiu, COO & co-founder of Finverity, commented: “The pace at which our industry is evolving is truly impressive. Five years ago, Supply Chain Finance (SCF) barely ever made the headlines. It wasn’t even a “real” financial product in many countries. Today, it’s deemed a key requirement to fuel economic growth for the years to come. This means we have moved into the mass adoption phase of SCF. What is needed today is very different from what has been used for the last 20 years. We have created a wizard which allows financial institutions to launch new products in the working capital space in 4 weeks instead of 12 months. We have also helped banks and NBFIs increase utilisation from existing clients and reduce losses due to fraud and default. Our time is now and with our new partners, I’m confident that Finverity will be a leading driver of SCF & working capital innovation across emerging markets”.

Viacheslav (Slava) Oganezov, CEO & co-founder of Finverity, commented: “When we started this fundraise the market was just starting to go through a rough spot, so there was a lot of talk about negative sentiment. However, what we found is that there is a significant amount of venture capital out there. Funds have been raised and need to be deployed, investors are just more selective. Our industry is counter-cyclical and we designed our business to grow in a sustainable way, with positive unit economics and a clear path to profitability in mind. The current macro trend has played to our strengths and allowed us to select amazing partners for the journey ahead! We are very grateful to all of our new investors and are excited to build out the next stage of Finverity’s growth in partnership with them!”

Andi Kazeroonian, Investment Manager at Outward VC, commented: “Whilst technology has powered exponential growth of the multi-trillion dollar SCF and trade finance industry in developed economies over the last decade, some of the world’s most important emerging economies have been somewhat left behind. Prohibitively high set-up costs, immediate and complex integration requirements and insufficient AML/KYC capabilities of existing platforms all act as contributors to manual and paper-based processes remaining the market norm. Finverity team’s deep understanding of these acute pain points has enabled the creation of a solution that is truly fit for purpose.

Fast deployment, easily configurable and customisable workflows, clean and intuitive UI, and market-focused origination capabilities are already having a profound impact on their target markets, enabling the launch and growth of SCF for organisations where it was not previously possible. We firmly believe that this dynamic, combined with the growth outlook and increasing digitalisation of emerging economies, all point toward an enormous opportunity for Finverity to emerge as the global leader in this space. As such, we at Outward are proud to be partnering with Slava, Alex and the rest of the team to support this exciting next phase of growth and beyond.”

Joachim Lacquer, General Partner & Co-founder at Acrobator Ventures, commented: “From the first call, it was clear that we were dealing with something special, both in terms of the magnitude of the problem Finverity is trying to solve and the characters of the founders, Slava and Alex. These founders possess a rare combination of grit, vision, humility and empowerment. The team members, advisors and investors who have joined them in their quest to create a more even playing field for SMEs in developing markets are a testament to that. It’s very rewarding to play a small part in this big-impact story.”

Oleg Bibergan, Managing Partner, s16vc founders fund, commented: “Having first met Alex and Slava more than 3 years ago, it’s been amazing to see how much progress the team has made towards fulfilling their vision of making trade finance globally fairer and more accessible. We are in the early days of SCF tech enablement, and it’s exciting to think about the scale of challenges and opportunities in this space. As a founders’ fund, we love partnering with ambitious founders looking to solve massive challenges and we are excited to be working with Finverity as they turn their vision into reality.”