The international Finance Corporation (IFC) and South American venture capital fund Dalus Capital have joined hands to infuse US$10 million into eFactor Network in order to help the Mexican fintech startup consolidate growth and develop new products.
A multi-funding and multi-currency electronic factoring marketplace, eFactor Network leverages its connection with large buyers, suppliers, and financial institutions to help clients land discount deals.
Factoring, also known as debtor finance, paves the way for small and medium businesses to sell their receivable assets, such as invoice, at a discounted value in order to meet their immediate cash needs.
The IFC, a member of the World Bank Group, says the factoring industry is an important financing alternative for small- and medium-sized enterprises, saying it can help them overcome capital and access-to-finance constraints.
“In the age of ERPs, on-demand availability of data and electronic invoicing, factoring can no longer be a mundane, isolated and mostly manual process,” stated Andi Dervish, IFC CIO and Global Head of Finch Investments. “Companies like eFactor bring supply chain finance to the 21st century and into the realm of capital markets, creating unprecedented efficiencies, competition and liquidity.”
Currently, the marketplace has more than 100 large buyers from different corporate groups, and serves more than 10,000 suppliers with the support of 30 financing institutions from Mexico and abroad.
“eFactor Network helps us build a Mexico that is a more productive world player by democratizing access to capital for thousands of Mexican companies. Its financial products and innovations are focused on solving companies’ working capital needs, while also focusing on providing qualified risk and liquidity with more competitive rates,” said Rogelio de los Santos, Managing Partner of Dalus Capital.