The slowdown in venture capital investments over the past years has forced some startups to turn to private credit, including debt capital, as a way to keep their operations afloat and weather the recession storm.
Today, private credit is a $1.2 trillion industry and accounts for 90 percent of all corporate debt in the middle market. Over the past five years, banks have largely exited corporate lending. Private credit, or lending by non-bank parties, has stepped in to fill the void. However, the lack of centralization and standardization in private credit makes navigating the space opaque and time-consuming for startups and medium-sized businesses. That’s why Finley has stepped in to help companies streamline debt capital raise and management.
Explaining the challenges faced by small businesses, Finley co-founder and CEO Jeremy Tsui saw the challenges of manual debt capital management firsthand while working at Goldman Sachs, where he witnessed how relationships between borrowers and capital providers could be made more efficient with purpose-built reporting, transaction, and management software.
Finley is a YC- and Bain Capital Ventures-backed fintech and SaaS startup that helps companies streamline debt capital raise and management. Finley’s software also helps these companies understand and make the most of their corporate loans, particularly those issued by private credit lenders.
Today, Finley announced it has secured a $17 million Series A financing to expand its support for different types of debt capital and develop a new software offering for debt capital providers. The round was led by CRV, with participation from returning investors Bain Capital Ventures, Haystack, Y Combinator, and Nine Four Ventures, as well as specialty lender Upper90. In conjunction with the funding, Finley also announced that James Green, a general partner at CRV, will join its board of directors.
“The current market conditions and limited equity and debt funding makes it even more important for companies of all sizes to be more conscientious of where they’re getting their funding, and how they can make the most of the funding they already have,” says James Green, general partner at CRV. “This is where the Finley team is helping with a product that brings innovation to the CFO’s office and enables companies to unlock full access to their debt capital funding.”
Founded in 2021 by Jeremy Tsui, Josiah Tsui, and Kevin Suh, Finley’s software helps growing companies automate due diligence, ensure compliance, and streamline ongoing reporting with their capital providers. The Finley team brings experience from Goldman Sachs, Nova Credit, and Palantir Technologies, and is backed by Y Combinator and Bain Capital Ventures.
Since developing its platform two years ago, Finley has proven its ability to handle complex credit facilities for a variety of customers, with a focus on technology companies like Ramp, Parafin, and TripActions. Finance teams at these companies rely on Finley to manage hundreds of millions of dollars in debt capital and to carry out tasks ranging from credit agreement digitization to fund disbursement and portfolio analysis.
“Finley is helping us manage our $300 million credit facility with Goldman Sachs,” said Loraine Tang, Voe President of Tax and Treasury at TripActions. “There are many compliance, reporting, and optimization tasks to coordinate in order to make the most of our funding. Finley’s software helps coordinate these tasks by pulling in data from across our systems and streamlining every many aspects of debt capital management for this facility.”
“From my own experience, I saw that missed deadlines and inaccurate reports often jeopardized access to funding for companies, particularly for startups and high-growth companies. The threat of losing access to capital was a constant headache for CFOs,” says Jeremy Tsui, co-founder and CEO of Finley. “By turning debt contracts into code, our software has been able to put guardrails around funding and compliance workflows, which helps our customers save money and gives business leaders peace of mind.”
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- Source: https://techstartups.com/2023/01/31/fintech-startup-finley-raises-17m-series-a-to-help-companies-manage-debt-capital-as-private-credit-reaches-all-time-high/
