MODIFI announces raising $24 million in Series B round

By Leandra Monteiro

Global FinTech MODIFI recently announced $24m in Series B, which brings its valuation to more than $120mn. The round was led by new investor Heliad Equity Partners with a co-investment from Neva SGR, the venture capital investment vehicle of Italy’s leading banking group Intesa San Paolo. Existing investors also participated significantly, including Global Founders Capital, Maersk Growth and Picus Capital. The funds will be used to grow MODIFI’s digital trade finance platform for SMEs into a global trade management hub. MODIFI’s Indian business has represented 36% of the company’s financed volume so far in 2021.

MODIFI is the only digital trade finance platform for SMEs that spans the three major trading regions of Europe, Asia and North America – a cluster which encompasses approximately 80% of global imports and exports. It provides SMEs with simple digital solutions to finance their trades, protect them from counterparty risk, and easily track and manage their shipments. The new funding round will power major upgrades to the platform, allowing MODIFI customers to take care of all trade-related activities in one place. This includes finding new trade partners and managing foreign exchange risk, among other things.

In India 99% of all firms are SMEs, contributing to 48% of the country’s exports1. The SME export sector has a lot of potential to grow even further but securing finance and finding new business partners remain a challenge. Having relied on traditional channels to find new business opportunities, such as trade shows and in-person meetings, SMEs were left stranded once COVID-19 hit. MODIFI’s mission is to empower SMEs to trade and grow their business, thus benefiting the Indian economy. MODIFI almost tripled its business in India between July 2021 and August 2021 and is well on track to grow 5x by the end of the year. MODIFI’s trade finance growth is coming from a variety of different sectors, with a special focus on textiles, handicrafts, and bunkering.

“We have successfully contributed to digitizing the trade finance industry here, with great help from the digital India initiative. However, finance is just one piece of the global trade puzzle, and Indian SMEs still lack the tools and know-how to trade with the ease and comfort enjoyed by their larger counterparts. Through this funding we intend to invest in a comprehensive trade management hub that will empower them to take control of their global trade activities. With Heliad Equity Partners and Neva we are delighted to have two new strong partners complementing our existing shareholder base“, said CEO and CoFounder, Nelson Holzner.

“MODIFI has not just grown in business and outreach in the last few years but also in its approach to addressing systemic issues related to global trade. We are very happy to support the stellar team around Nelson Holzner, Sven Brauer and Jan Wehrs in their journey to become the leading trade finance and management platform for SMEs. Small businesses represent 90% of all firms worldwide, forming the backbone of local economies. It’s critical that we help them grow and flourish” shared Falk Schaefers, CEO of Heliad Equity Partners.

“The ability to raise funds and attract investors and industry partners worldwide in a very short time confirms MODIFI’s enormous potential to become a billion euro company. It’s clear that global trade is in need of digital solutions. MODIFI has already done a lot to simplify and automate paper-heavy trade finance processes, and we are looking forward to seeing the fintech company tackle a broader set of challenges related to global trade” said Mario Costantini, CEO of Neva SGR.

MODIFI successfully launched in the US, Netherlands and Bangladesh in the first half of 2021, after raising a $60m debt facility from Silicon Valley Bank. The company currently operates out of 9 offices in New York, Berlin, Amsterdam, Delhi, Mumbai, Dhaka, Shenzhen, Hong Kong and Dubai.