British FinTech BankiFi has secured a 2.2 million pound (approximately $3 million) investment in a funding round to help financial institutions (FIs) better serve small- to medium-sized businesses (SMBs), Business Leader reported.
The company will use the money to expand its products and services, add to its client base and target new national and international markets, according to the report.
“[SMBs] and early-stage innovators are a vital pillar of our economy and will play an important role in [the] U.K.’s post-pandemic recovery, but many continue to be hampered by inadequate banking services,” BankiFi Founder and CEO Mark Hartley said, per the report.
“BankiFi [wants] to change that by putting banks at the heart of businesses’ day-to-day needs,” he said in the report. “Before the pandemic, invoice cycles took a month on average, meaning most businesses didn’t get paid for their services or products for more than 50 days. That delay has now increased to more than 70 days, putting immense pressure on the cash flow of many [SMBs].”
Nearly three-quarters of an SMBs’ time is spent on “non-core” tasks that include time-consuming administrative work, the report stated. This issue is compounded by the fact that late payments owed to businesses stand at upwards of 6,000 pounds (about $8,300) on average.
“The good news is that banks are beginning to see the sizeable opportunity to tap into this under-served market,” Hartley said, per the report. “Our software allows them to offer advanced services to [SMBs], and we’re seeing a real uptick in demand for our products as banks look to compete in this space.”
Hartley founded BankiFi in 2017 and previously scaled the payments technology provider Clear2Pay, according to the report.
In an interview with PYMNTS earlier this year, Hartley spoke about the importance of open banking to help SMBs receive timely payments, manage cash flow more efficiently and ultimately grow.
Read more: Open Banking Emerges as Key to SMB Cash Flow in UK
“In the U.K., most companies are invoicing terms of 30 days,” he said. “But, prior to COVID, it was taking about 50 days to receive the money, and then post-COVID, it was taking about another 20 days. So, the average payment time is now … 71 days on invoice in terms of 30 days.”
