FTrans Corp., a New York-based company that helps B2B sellers receive a loan against accounts receivables to shorten cash collections, has raised $7.5 million in new VC funding. Greenhill SAVP was joined by return backers Total Technology Ventures and New Atlantic Ventures.
Greenhill SAVP announced today that it has invested in FTRANS, Corp. (“FTRANS”). Greenhill SAVP led the financing round of $7.5 million, with an investment of $2.5 million, and was joined by existing institutional investors Total Technology Ventures and New Atlantic Ventures (formerly Draper Atlantic). As a result of this financing, Brian Hirsch, Managing Director of Greenhill SAVP, will join the FTRANS Board of Directors.
Modeled after bank credit card systems, FTRANS (www.ftrans.net) enables business-to-business (B2B) sellers to receive a loan against accounts receivables (A/R) to shorten cash collections for less than the cost of accepting a credit card payment or operating an internal credit system. Typically, sellers receive their cash in 24-48 hours after submitting an invoice. FTRANS acts as an interchange and delivers a web-based service that integrates and processes transactions between B2B sellers, buyers, and banks.
Smaller B2B companies have often struggled to improve their cash flow. Most traditional forms of lending (asset-based lending, factoring, receivables discounting) have either been too expensive or unavailable altogether. B2B companies under $25 million currently have outstanding trade credit of over $900 billion and have been traditionally forced to take on credit risk and advance credit according to terms set by their customers.
Historically, regional banks have turned away many potential small to medium business customers because of their inability to loan against A/R of unknown quality from a lack of information on B2B buyers' creditworthiness. FTRANS' solution addresses this problem and provides financial flexibility in the same manner as banks and credit card systems have done for retail merchants.
FTRANS has already deployed its product across Synovus (NYSE: SNV), a financial services holding company with over $33 billion in assets as well as with other banks. FTRANS is also in the process of launching through other large banking partners.
Greenhill SAVP's investment in FTRANS illustrates the fund's continuing emphasis on backing disruptive financial technology-enabled services companies. “FTRANS is changing the way in which small businesses access working capital and is empowering banks to reach the small to medium business sector more effectively,” said Brian Hirsch, Managing Director of Greenhill SAVP. “This is an enormous market opportunity and we are excited to back a world-class team.”
“Finding the right venture capital syndicate who could introduce us to key strategic partners in the financial services sector was essential for FTRANS,” said John Hayes, CEO of FTRANS. “We are delighted to have Greenhill SAVP as our newest investor and have already begun realizing the value of their network and domain expertise in this space.”
About Greenhill SAVP
With over $100 million under management, Greenhill SAVP makes early stage venture investments in technology-enabled services and business information services companies. Prior fund manager investments include LivePerson (NASDAQ: LPSN), OpenWave (NASDAQ: OPWV), YellowJacket (acquired by the Intercontinental Exchange, NYSE:ICE), UGO Networks (acquired by Hearst Corporation), and KnowledgeStorm (acquired by TechTarget, NASDAQ: TTGT).
Greenhill SAVP is an affiliate of Greenhill & Co., Inc. (NYSE: GHL), an independent global investment banking firm with offices in