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Defacto closes $167 million securitization fund

Source: Defacto

Defacto, the French lender to SME by API, closed a securitization fund with Citi and Viola Credit for up to €167m.

Citi will be the senior lender of the fund while Viola Credit has renewed its trust in Defacto by continuing its support as a mezzanine lender of the fund. This new facility allows Defacto to continue its exponential growth with a yearly funding capacity of up to 1 billion euros.

Founded mid-2021 by Jordane Giuly, Morgan O’hana, and Marc Henri Gires, Defacto provides seamless, flexible and instant financing to small and medium enterprises (SMEs) in Europe.

Defacto provides its loans to SMEs via an embedded approach. Defacto’s API-first product enables third parties such as B2B marketplaces, fintechs and other digital platforms to embed Defacto’s financing solution directly in their own products. As a result, SMEs can benefit from a seamless and instant lending experience, while platforms increase their differentiation and customer satisfaction.

Over the last 18 months, Defacto has integrated several partners such as Malt, Qonto or Pennylane, and has answered the financing needs of 7,000 European businesses from 5 different countries for 200 million euros.

For partners with constrained tech resources, Defacto has launched in May 2023 a low-tech version of its product, Liquid, to enable an easiest and fastest integration of Defacto.

The securitization fund of up to €167m will have an initial size of €67m, with increases subject to lender’s consent.

Jordane Giuly, cofounder and CEO of Defacto said:

"We are delighted to secure this facility with Citi, one of the largest banks in the world, and having Viola Credit renewing its trust in Defacto’s team, strategy and product. In the current macro environment, this is an important milestone for enabling our growth with both existing and new partners and answering the financing needs of thousands of SME."

Ruthi Furman, General Partner and Founder at Viola Credit:

“Defacto has proven to have a sustainable business model in the B2B lending space. The company, which was created mid 2021, has rapidly grown, while keeping its costs under control thanks to a strong focus on process and operational automatisation and on data. As Viola Credit, we are delighted to participate in this new facility, allowing them to decrease their overall cost of funding.”

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