Quality Tops Quantity For B2B Backers

This week, venture capital for B2B startups is all about quality — not quantity. Just four deals were secured but by some impressive companies that aren’t your run-of-the-mill enterprise-serving firms.

For instance, the week saw a rare investment round for a company dedicated to improving B2B payments processes and with a unique perspective on the downfalls of virtual card payments. Another B2B startup, operating in the SaaS space, positions itself in an unlikely vertical, while the biggest investment round of the week placed $50 million into a startup that is soon to go public.

We break down the $68.3 million in B2B venture capital from the last seven days below.

B2B Payments

Finexio

It’s quite rare that a FinTech startup that focuses on B2B payments emerges — even rarer that venture capitalists would step in to support it. But that’s exactly the case with Finexio, which announced on Monday (Aug. 8) a $1 million seed round for its solution, which provides technology to identify the most efficient and cost-effective payment rail for B2B payments.

Of particular interest to the company is the challenge of virtual cards, which, according to CEO and Founder Ernest Rolfson, are hardly virtual at all.

“Having spent years as financial processes consultants and working at large ‘FinTech’ and payments companies, we experienced firsthand the paper-based, slow, manual delivery of ‘virtual credit cards,’” he said in a statement. “These cards are currently mindlessly printed on tens of thousands of pieces of paper monthly, then mailed or faxed to suppliers.”

James R. Heistand led the funding round, reports said. Loeb.nyc and angel investors also participated. The funding will be used to help the company build out its payment platform and develop integrations for suppliers that need to get paid, Finexio said.

Alternative Lending

Bigstone

Over the weekend, Australia’s Bigstone revealed it had raised $2.3 million in seed funding from venture capitalist firm CVC, Lighthouse Venture Partners and others. The company said it will use the support to grow its presence in the alternative small business lending space through marketing and developing.

“Our aspirations are high, but we have to prove that we can underwrite loans first,” said its cofounder and chief executive, Boyd Pederson, according to reports. “So, the focus is on marketing, hiring people … expanding our reach and growing into advisory channels.”

“For the next 12 months, we expect to be building the bulk of the business here,” he continued.

Big Data

MapR

In the biggest funding round of the week, Big Data startup MapR revealed $50 million raised on Tuesday (Aug. 9). Future Fund, based in Australia, led the round, which also saw participation from existing backers Google Capital, Lightspeed Venture Partners, Mayfield Fund, New Enterprise Associates, Qualcomm Ventures and some others.

MapR already has big clients, like American Express and Qualcomm, reports said, and is looking to go public. While it won’t reveal its valuation, MapR was valued at more than $1 billion at the time of its last funding round; so far, it’s raised $224 million in equity and debt financing.

Software-as-a-Service

Zenoti

The enterprise has fueled a boom in the Software-as-a-Service segment, with some developers focusing on particular industries like health care or construction. But one startup just secured $15 million in funding for a vertical that isn’t often the target of enterprise tech firms.

Zenoti services spas that have multiple locations, reports said on Thursday (Aug. 11), and was launched after its founder, Dheeraj Koneru, launched his own spa business in India. The struggle to run operations across locations with current software offerings led Koneru to develop the startup that provides software for inventory, payroll and management of other business processes for salons and health clubs.

With the $15 million, the company said it will expand from its existing markets in the U.S. and Asia into Europe and beyond.