Defacto factors in €15 million, increases lending capacity to €400 million

Paris-based provider of instant financing to small and medium enterprises, Defacto has raised €15 million in a Series A funding round. With its “Capital by API, not paperwork,” approach, the investment paves the way for an increased lending capacity up to €400 million, and  the startup intends to commence with international expansion plans, with Spain, Netherlands, Belgium, and Germany all in the roadmap. Since late 2021, Defacto has raised €26 million.

Founded by Spendesk co-founder Jordane Giuly, Morgan O’hana, and Marc-Henri Gires, Defacto is stepping up its game to help SME’s combat rising interest rates, and pandemic-loan repayments that loom over the heads of growing businesses.

“Cash flow and access to liquidity are once again reasons for concern due to inflation, repayment of state covid loan and rising interest rates. Traditional banking caters less to SMEs and processes are too slow,” explained O’hana. “We are building a product for builders, not bankers. Access to capital should be fair and instant. Banks rely on data that is at least 18 months old and then take 4 months or longer to process loan applications. We move in real-time.”

Since launching in France, Defacto has partnered with 15 B2B marketplaces, fintechs, and e-commerce platforms including Malt and Agicap and Pennylane, and distributed over €30 million in short-term loans.

“We decided to work with Defacto for its flexibility, the quality of its API, and the integration experience. They have been a great ally in our challenge to offer an even more delightful and seamless payment experience for our clients and freelancers,” commented Malt’s Frederic Tan.

Defacto’s €15 million in Series A round was led by Northzone with Headline, and GFC participating. 

“Finance needs to shift towards real-time data and processes. Small and medium businesses make for 99% of all European businesses. Yet traditional banking is increasingly shy in supporting them. Defacto’s Capital by API provides entrepreneurs with forms of credit that scale with their needs and are also more fair and transparent. It’s an engine for growth. I have rarely met a team so customer-focused and achieving so much in one short year,” concluded Headline’s Jonathan Userovici.