Financing of commerce transactions is becoming big business in B2B marketplaces. And that flurry of B2B buyers looking for short-term financing for making digital purchases on marketplaces is catching the eye of ecommerce investors as well.
A case in point is Transigo, a provider of software-as-a-service (SaaS) applications that enables cross-border B2B marketplaces to provide point-of-sale financing to its buyers.
The company, based in Richmond, Virginia, has raised $70 million in new working capital from a pair of Israeli companies: E.N. Shoham Business Ltd. and Nawi Brothers Group Ltd.
The influx of cash will allow Transigo to expand its point-of-sale SaaS platform to major B2B marketplaces in Asia in the first quarter of 2022,” says CEO Nir Tal.
“Cross-border B2B ecommerce is booming, with the market in China alone expected to hit almost $1 trillion in 2022,” Tal says. “However, lack of credit is limiting growth, and this is especially the case in Asian B2B marketplaces, which typically provide zero credit terms.”
Transigo’s point-of-sale SaaS platform integrates with the marketplace platforms via a secure API and enables the marketplace to offer approved buyers up to $80,000 in point-of-sale credit with a maximum term of 90 days, the company says.
Typical buyers are usually small-and-medium-sized enterprises with limited working capital, and providing deferred financing can help improve the marketplaces’ buyer experience, boost retention, increase average order values, and reduce exposure to seasonal fluctuations, Transigo says.
To assess prospective buyers and minimize risk, Transigo also uses a scoring algorithm to provide what the company says are highly accurate estimates of a buyer’s future financial performance.
“This funding engagement, being with two public companies, will enable us to connect with more traditional institutions such as banks,” Tal says. “This will further strengthen our financing capabilities.”
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