Hong Kong-based fintech startup FundPark, which specializes in providing trade finance to small and medium-sized enterprises, announced that it managed to raise $500 million from Goldman Sachs.
The specified receipt of funds was the second financing mechanism from the mentioned American investment bank in the last two years.
Goldman Sachs has doubled the asset-backed securitization fund to $500 million compared to what was provided by FundPark in 2022. This was announced by the CEO and co-founder of the startup Anson Suen Wai-Ioi. He also noted that this amount of funds is one of the largest ever received by fintech companies in Asia. According to him, Goldman Sachs’ decision to increase funding to $500 million is a combination of how the bank estimates FundPark’s track record over the past 18 months and the firm’s ability to quickly raise capital.
The startup intends to direct investments received from one of the largest players in the American banking sector to provide loans to small and medium-sized enterprises, whose applications for trade finance are often rejected by creditors. Data from the Asian Development Bank shows that the deficit of the specified financing for small businesses worldwide is $2.5 trillion.
FundPark was founded in 2016. Since the start of its activity, the startup has allocated $2 billion to small and medium-sized enterprises. This financing was provided primarily in the cross-border e-commerce sector, which needs working capital. About half of the loan disbursements were made in 2023.
Anson Suen Wai-Ioi says that the indicators of the underlying portfolio of his startup are sustainable and healthy and exceed the market benchmark for banking and non-banking organizations. At the same time, he did not report detailed information about specific figures.
FundPark provides loans without the typical collateral, such as property. In this case, loans are secured by the cash flows of small and medium-sized businesses, inventories, or accounts receivable. The company uses its own credit model, controlled by artificial intelligence, to asses borrowers and provide financial solutions.
The specified credit model with AI has the function of predicting customers’ business performance. In this case, the possibility of debt repayment and future cash flows are implied.
Anson Suen Wai-Ioi says that his company’s credit model can develop and better understand the creditworthiness of the client. He emphasized that the startup’s solution does not require what a traditional bank needs, meaning a standard collateral or security such as property.
Anson Suen Wai-Ioi said that new financing from Goldman Sachs will allow his company to continue providing loans to low-income digital small businesses. Currently, the startup is striving for growth similar to last year’s. The company also intends to continue investing in its technologies and data analysis capabilities. The startup plans to provide analytical information to customers as an additional service.
Moreover, the firm has an ambitious intention to scale beyond 15 markets in regions such as Greater China, Southeast Asia, Europe, and the United States. As part of these efforts, the company’s focus will be on exporters and importers in the sphere of e-commerce in China.
The headquarters of the startup is located in Hong Kong. The company also has offices in Chengdu and Shenzhen.
FundPark plans to partner with e-commerce platforms such as Amazon and Walmart Marketplace, and logistics service providers, including Cainiao, to gain more access to interaction with small and medium-sized merchants.
Anson Suen Wai-Ioi expects the trade finance market to continue to grow. In his opinion, the corresponding probability is high, since business activity is moving into the online dimension. Anson Suen Wai-Ioi says that a digital footprint combined with artificial intelligence technology and data analytics will allow one to receive information online and respond quickly, and the company’s customers from among small and medium-sized businesses will be able to scale and realize their potential. According to him, such scalability is what his company is striving for as part of its efforts to overcome the huge funding gap.
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