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Spanish fintech that offers quick cash to SMEs gets £7.5M funding, plans UK rollout

AREX Markets
Image credits: AREX Markets

The COVID-19 pandemic has subjected the SME business to immense pressure with many suffering from slow or frozen payments. At this time, AREX Markets helps them by unlocking their time and cash flow and financing up to 95% of all invoices sent to the platform within 24 hours.

The Barcelona-based company is a competitive data-driven fintech, which aims to reduce the costs for SMEs and lets them access cash quicker. In a recent development, the company just announced that it secured €8.8 million (nearly £7.5 million) Series A funding to accelerate its rollout in the UK and Spain.

UK acceleration plans

The investment round was led by two London-based VC investors – Mosaic Ventures, which has strong fintech and SME financing expertise, and LocalGlobe. Also, existing investors including Lifeline Ventures and angel investor Richard Laxer, former CEO of GE Capital took part in the funding round. This round follows the seed funding round of €3 million (nearly £2.6 million) that AREX secured back in 2016.

The Spanish fintech has launched its proprietary technology that delivers embedded lending into accounting systems, allowing SMEs frictionless access to a competitive financing marketplace in the UK and Spain. The AREX technology seamlessly integrates into our customers’ software and processes by using data to drive automation of the often cumbersome financing workflow.

Toby Coppel, Partner of Mosaic Ventures added: “AREX is creating much needed cash flow opportunity, flexibility and access for SMEs – just as so many of these are coping with major pressures on their company finances. The business’ mission to change the face of SME lending, has already seen tremendous successes in the Nordic markets. As they expand further into the UK and Spain, it is an exciting time to come on board and partner with the management team to support their international growth.”

Timo Ahopelto, Founding Partner, Lifeline Ventures, said: “The AREX team is building an entirely new asset class and a critically important platform for SME financing that is game changing. SMEs in the UK and Spain will benefit from this alternative cash flow approach and be able to rebuild and scale their businesses after what has been a turbulent year.”

Julia Hawkins, General Partner, LocalGlobe added: “SME financing is massively underserved and is ripe for a digital first solution. AREX’s unique approach has been extremely effective in the Nordics, and we are now excited to help SMEs in the UK and Spanish markets access their capital much quicker. They are a team with proven execution, which can transform the SMEs growth trajectory”

Alternative financing for SMEs

Established by Perttu Jalkanen, Nikolai Hentsch, and Hannu Krosing in 2014, AREX Markets operates in Barcelona, London, and Helsinki. AREX helps SMEs to take back control by giving them access to a competitive marketplace, bridging the gap of capital market liquidity and cash flow. Usually, only large companies have benefited from this type of financing and AREX makes it possible for SMEs to be afforded the same benefits: fast, flexible and a cheaper cost of financing. The company works with accounting and software partners to offer seamlessly integrated financing products to SMEs.

Its unique approach to transform the invoice factoring industry drove strong interest in the round alongside its proven track record in the Nordics. Also, it witnessed sustained business growth at nearly 20% month-on-month during 2021. This innovative approach saw AREX named Landing Platform of the Year in the prestigious Future Digital Awards for Fintech & Payments by Juniper Research.