Behalf Closes $119 Million Series B

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Check out the big raise for Behalf.

Alternative small-business financier Behalf announced a $119 million investment that takes the company’s total capital to $129 million. The Series B round was led by MissionOG, an early to growth-stage VC firm, and the new funding will go toward adding staff, as well as providing more and larger working capital lines to SMEs.

Joining MissionOG in the Series B were Maverick Ventures, Sequoia Capital, Spark Capital, and Victory Park Capital. Victory Park Capital provided a credit facility as well as an equity contribution.

Behalf also announced the opening of new headquarters in New York City.

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From left: Behalf VP of Product Meeka Metzger; Director of Product, Andrew Abshere; and founder and CEO Benjy Feinberg presented the Behalf’s Vendor Platform at FinovateFall 2014 in New York.

Behalf enables small businesses to buy up to a $50,000 inventory. The company directly pays vendors for the small business, and the business pays Behalf back on terms ranging from $10-$30 per $1,000 per month. Behalf uses its proprietary credit-scoring technology to approve as many as 40% of its applicants, and can provide credit decisions in less than four minutes.

Merchants appreciate being able to pay vendors on whatever terms their vendors demand, and repay Behalf on terms that may be more flexible and favorable to them.

The company began 2015 with a new collaboration involving MasterCard and Comdata, to provide financing options for small businesses using MasterCard. In February, Behalf CEO Benjy Feinberg was interviewed by Ideamensch, and in March, the company was a finalist in the “Best B2B Innovation” category at the 2015 PYMNTS Innovator Awards 2015. Founded in 2011 and based in New York City, Behalf demonstrated its Vendor Platform at its Finovate debut, FinovateFall 2014.

Finovate Alumni News

On Finovate.com

  • “Behalf Closes $119 Million Series D”
  • “Neon Release Adds Touch ID and Enhanced Notifications to Oink 2.0″
  • “ShopKeep Rings Up $60 Million Investment”

Around the web

  • Citibank India and MasterCard launch digital wallet, Citi MasterPass, in India.
  • This is Money features TransferWise in a look at the lack of transparency in exchange fees.
  • LoanNow earns #4 spot in Orange County Business Journal’s “Best Places to Work in Orange County 2015” roster.
  • PYMNTS looks at how PayPal’s Paydiant is powering Subway’s mobile-payments app.
  • Payments Views talks with Doug Yeager, HCE inventor and CEO of SimplyTapp, in its latest podcast.
  • Expensify launches New Investment Fund, Expensify Ventures, for fintech startups.
  • American Banker considers how banks are using startups such as Social Money and Qapital to bolster their offerings.
  • Dashlane launches One-Tap Password Changer for Apple Watch and iPhone.
  • John Hancock Retirement Plan Services now offers Morningstar’s HelloWallet financial wellness tool to plan-sponsors on its Total Retirement Solution platform.
  • Arroweye Solutions to provide EMV Credit and Debit Cards for Mountain America Credit Union.
  • TechCrunch: Betterment tops 100,000 customers and $2.5 billion AUM.
  • Taulia reports record revenue and ten customer wins for Q2 2015.
  • Mobile Payments Today looks at InComm’s drive to bring open-loop prepaid to mobile wallets.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

 

Behalf Announces Collaboration with MasterCard and Comdata

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Just a few days ago we hinted at some “big news” coming soon from small business financing and vendor payment specialist, Behalf.

The wait is over. In a collaboration with MasterCard and Comdata, Behalf will offer SMBs alternative payment terms for merchants that accept MasterCard. Behalf will take advantage of MasterCard’s Virtual Card platform, while Comdata will provide payment processing.

“Our partnership with Comdata, coupled with MasterCard’s reach, will dramatically improve the usability, scale, and security of what is already a great product,” said Benjy Feinberg, Behalf founder and CEO. “We can’t wait to bring MasterCard-accepting merchants onto our vendor platform, making it easier for small businesses to purchase the goods, services, and supplies they need.”
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Behalf’s technology helps SMBs better manage cash flow and pay vendors faster. The company lends up to $10,000 for up to 120 days, enabling small business owners to pay vendors “on Day One” and repay Behalf on terms that work for them. And with the new partnership with MasterCard, added Feinberg, SMBs using Behalf will be “earning cash incentives just by paying their bills.” Vendors benefit by receiving prompter payment, dealing with fewer collections issues, and enjoying better cash flow, as well.
Founded in 2011 and based in New York City, Behalf made its Finovate debut at the New York conference last fall, where it demonstrated its vendor platform. Get to know more about Behalf in our latest Finovate Debut feature.

Alumni News– January 8, 2015

  • Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Finovate-F-Logo.jpgForbes series on thought leaders in business and technology features Ayasdi CEO and co-founder, Gurjeet Singh.
  • defi SOLUTIONS announces its Loan Origination System is now integrated with Dealertrack’s eDocs.
  • PrivatBank upgrades its Privat24 business account management mobile app.
  • Service Credit Union hires Insuritas to open and manage turnkey insurance solution.
  • Sonavation unveils IDKey M-Series fingerprint scanner for storing passwords, data.
  • WSJ blog post on banks and mobile payments features quote from Paul Thomalla, SVP and managing director EMA at ACI Worldwide.
  • Loop announces two new OEM partners, XPAL Power and Trident Case.
  • All Day features Dynamics interactive payment cards in its review of the “coolest gadgets from CES 2015.”
  • Radius reflects on its collaboration with big data analytics company, BIME.
  • Dealbook looks at the cooperative side of fintech innovation with Behalf, Nymi, and Dynamics.
  • CSI globalVCard announces availability of the Android version of its mobile payment.
  • EZBOB boosts its maximum loan size from £50,000 to £120,000, and extends its maximum term length from 12 to 15 months.
This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Finovate Debuts: Behalf Helps Small Businesses Pay Vendors Faster

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The Finovate Debuts series introduces new Finovate alums.
Behalf demoed its small business financing solution at FinovateFall 2014 in New York.

Behalf provides small- and medium-sized businesses, short-term capital in the form of direct payments to their vendors.

The Stats
    • Founded in 2011
    • Headquartered in New York City
    • Raised $10 million 
    • Has 25 employees
    • Benjy Feinberg is CEO
The Story
Seven years after the Global Credit Crisis, small businesses are still challenged to find the capital they need to grow. In this environment, entrepreneurs have emerged to fill the tap. Behalf, founded in 2011 and based in New York, is one such company.
Formerly known as “Zazma”, the company recently changed its name to Behalf to support their value statement: “We pay on your behalf and you pay us back on your terms.
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More specifically, Behalf helps small companies and entrepreneurs deal with the often conflicting payment terms and conditions from various vendors. Perhaps one vendor won’t accept credit cards, another vendor offers only 30-day terms, and yet another insists on the promptest payment possible. Behalf uses short-term financing to pay for purchases of inventory or equipment, allowing businesses to “take their terms with them” to any vendor they are buying from and repay Behalf on a schedule that works for them.
In paying vendors directly, Behalf hopes to differentiate itself from other small business lenders. And while this adds risk to Behalf’s business, it also adds speed to the process, making the financing solution that much more attractive – for both merchants and their vendors. Businesses are able to better manage often-competing payment terms from different vendors, Feinberg explained, “and vendors are happy because they are getting paid on Day One. There are no issues with collections.”
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The goal is to help small and medium-sized businesses better manage their cash flow, and ensure that a temporary capital shortfall does not undermine longer-term business opportunity. Moreover, using Behalf helps newer SMBs build the kind of credit that will be beneficial as the business grows and its capital needs change.
The Technology
The process of getting funding from Behalf is straightforward. Clients create an account with name, address, business name, email address, and a password, and are then taken through a credit application process. Here all that’s required is a personal and business address, as well as a social security number.
“We don’t ask for bank statements, or to connect accounting software, or endless questions abut the business,” said Andrew Abshere, Director of Product, from the Finovate stage last fall. “All we need are these three pieces of information. And like that we can return credit terms in real time.”
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Behalf charges $10-30 a month for every $1,000 borrowed, and payment periods typically range up to 120 days. Borrowers are only required to provide their social security number for security and identity purposes. No bank statement is required to apply for funding, but for those setting up automatic repayments, some bank account information is necessary.
Users can even pay vendors directly from the Behalf platform. The “Add a Payment” feature lets users set up the various vendors to be paid, and the “Repayment” feature allows the user to establish the specific repayment terms for the vendor.
The Future
Companies looking to excel in this space need to accomplish what traditional small business lenders have not or can not. They need to have or have access to the capital small businesses need. They need to have a sophisticated method for establishing business creditworthiness that is ideally both unique and superior compared to existing methods. And lastly, the lending process needs to be as seamless and speedy as it is robust and secure.
As far as Behalf is concerned: so far so good. The company enjoys the investment support of institutions like Sequoia Capital, which led the Behalf’s seed round in 2011, and Spark Capital. And strong press from outlets like VentureBeat has been a benefit, as well, even as the company’s transition from Zazma to Behalf remains less than a few months old.  
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(Above, left to right: Meeka Metzger, VP Product; Andrew Abshere, Director, Product; and Benjy Feinberg, CEO)
Behalf’s approach to small business financing embraces an “electronic payments with big data” trend they have been on the lookout for since at least 2013. And while there is an emphasis on the financing needs of small businesses, Behalf also looks to bring suppliers and vendors to the platform on the other end. Here, the idea is to help vendors provide better repayment terms to their clients, faster pre-approvals, and say goodbye to the collections process.
“Small businesses buy more, they take their terms with them, and their vendors sell more. So everybody wins from the process,” Feinberg said.
In terms of what’s next, the company has a “big announcement” they’ve been teasing since Q4 2014, giving Behalf watchers something to look for in the new year. Stay tuned!


See Behalf demo its technology at FinovateFall 2014

Alumni News– October 16, 2014

  • Finovate-F-Logo.jpgFidelity to offer Betterment to 3,000 financial advisers who use its institutional wealth services division.
  • Lending Club named winner of The Economist’s annual Innovation Awards in the consumer products category.
  • TechCrunch reports: Sequoia-Backed Behalf Buys Stuff For Small Businesses Looking To Grow.
  • ReadyForZero PLUS Credit now shows credit scoring factors.
  • FT column on technology and banking features PhotoPay.
  • Pando Daily takes a look at Quantopian’s plan to launch a hedge fund.
  • Jumio teams up with Ribbit.me to build ID verification process for RibbitRewards marketplace.
  • Motif Investing iOS app adds account access with Apple TouchID.
This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Behalf Unveils its Proprietary Credit Scoring Solution for Small Business

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This post is part of our live coverage of FinovateFall 2014.

Making its way to the stage next is the team from Behalf to demo its Vendor Platform.

“We are showing the value of our platform to vendors through a simple demonstration of how easy it is for a vendor to pre approve his customers, onboard them, and offer them the Zazma credit line they need.”
Presenting: Benjy Feinberg (CEO) and Andrew Abshere (Director, Product)
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Product Launch: August 2014
Metrics: $10M, 25 employees
Product distribution strategy: Direct to Business (B2B), through other fintech companies and platforms
HQ: New York, NY
Founded: 2011
Website: behalf.com