A fintech start-up that provides invoice finance to the recruitment industry has received £110m in funding, including from the founder of the Bebo social network.
Sonovate, which funds companies that use contractors, secured the debt and equity from backers including M&G Investments, Dawn Capital and Rocket Internet. MXB Holdings, co-founded by Michael Birch, who started Bebo, also invested. Sonovate has now raised more than £150m.
The Cardiff company was founded in 2011 by Richard Prime, 44, and Damon Chapple, 41, who had both been executives in recruitment.
It provides finance to recruiters that pay contractors on behalf of clients but have to wait up to 90 days to be paid themselves. It claims to have funded more than £925m of invoices in 39 countries. Last year it made a pre-tax loss of £6.1m on sales of £6.1m, versus a £4.4m loss the previous year.
Alternative finance providers emerged after the financial crisis as banks reduced lending. Among the biggest are OakNorth, a small business lender that received $440m from Japan’s Softbank, and listed peer-to-peer platform Funding Circle.