DueCourse, the cloud-based invoice financing service for SMEs, has secured £6.25 million of investment in its latest round of funding; the largest investment seen outside of London for a FinTech company. The round includes £1.25m of equity and £5m of debt for lending to UK SMEs. New backers include the founders and investors of Zoopla, LoveFilm, TransferWise and LinkedIn.
This new round of angel investment puts DueCourse in a strong position within the SME business lending market in the UK, which lent an estimated £53 billion to small businesses in 2014.
Launched in 2015, Manchester-based DueCourse’s software technology unlocks the cash tied up in unpaid invoices, giving SMEs control over their cash flow and empowering them to meet their ambitions.
8 out of 10 small businesses who use the cash flow utility go on to regularly use the product; demonstrating that the service is proving very popular with UK SMEs. The business is planning to raise a further Series A round of £10-15 million in funding over the next 10 months to expand its service around the world.
Aimed at small businesses who regularly invoice clients, the free software links to a company’s online accounting platform and uses it’s proprietary risk engine to assess which invoices are eligible for a cash advance. Once an advance has been requested, the money reaches the customer’s account in a matter of hours.
The traditional invoice finance model requires an SME to handover all their invoices, can take weeks to set up and requires signing a lengthy contract with complicated fees. The finance company also informs all customers that the SME is in a finance arrangement.
DueCourse is a completely new cash flow utility that offers a flexible, immediate and accessible source of finance for UK SMEs. No contracts are needed to install the free software and it is completely confidential (end customers are never aware that a business is using the service).
Businesses can choose how often they use it and when they use it; whether that’s hiring new people, funding new resources or purchasing equipment.
The investment follows the news that the company is rapidly expanding its addressable market and has been chosen to partner with the leading online accountancy packages.
In addition to new partnerships, the investment has also provided DueCourse with a new opportunity to expand the team, with Dylan Smith – a former Apple engineer – joining the company as Technical Architect. He joins an already impressive line-up of businesspeople and technical experts, including Kate Sharp the former chief executive of ABFA (The Asset Based Finance Association) who sits on the company’s advisory board.
Paul Haydock, CEO and co-founder of DueCourse, said: “We started DueCourse because we realised traditional methods of finance are completely out of sync with what today’s SMEs need. We saw the opportunity for a company to disrupt the market and help SMEs get access to the cash they need to fuel their business, in real time. We want to be seen as a new kind of cash flow utility – once a business has linked their accounting package for free, DueCourse is simply there in the background for them to access the money in their unpaid invoices whenever they need it. This extended Angel round of investment was actually oversubscribed, which highlights just how much interest there is among investors around our scalable, data-led technology and its application around the world. The funding is a great boost for the company and will help us go from strength to strength as we continue to expand and improve our software.”
CEO Paul Haydock graduated from the University of Cambridge with a first degree in engineering before going on to start his own successful business, myparceldelivery.com at the age of 24 and winning the Digital Entrepreneur of the Year award in 2011. Paul then successfully exited the business in 2013 before going on to found DueCourse in 2014 with the aim of empowering SMEs to take control of their cash flow.
Cash flow problems are one of the major issues affecting small business growth in the UK. Figures from the Association for Asset Based Finance (ABFA) show that businesses with a turnover of under £1 million wait on average 72 days to be paid by suppliers and, according to Santander, 46 per cent of businesses report being hit by at least one recent cash flow setback.
In response to this and the traditional lenders such as banks showing a reluctance to lend to SMEs, invoice financing in the UK has risen 63 per cent in the first quarter of 2016 to £711 million, compared to the same period in 2015 when this figure stood at £435 million.
DueCourse is the smarter way for SMEs to fuel their business. It works by freeing up the cash tied up in unpaid invoices, as and when businesses need it, in just a few clicks. Unlike traditional invoice financing, no contracts are needed and it’s completely confidential. The service is there for SMEs to use as and when they need it, helping them to achieve their business ambitions, whether that’s hiring new people, funding new resources or purchasing equipment.
DueCourse’s smart lending technology works by linking with all leading cloud accounting packages and running a vast amount of data on the company (and their customers) through a proprietary risk engine in order to automatically offer SMEs the option of advances against their unpaid invoices. Once an advance is requested, the money reaches the company’s bank in less than 24 hours.
The Manchester-based business was launched in 2015 and has recently received funding from founders and investors of Zoopla, LoveFilm and Transferwise. Its last round of investment was oversubscribed and achieved £1.25 million. The company is on track to advance £16.5m worth of funds this year.