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Stenn was founded by Greg Karpovsky in 2015 | Image Credit: Stenn

Stenn, a global non-bank trade finance provider, has raised $50M (approximately €46M) at a valuation of $900M (approximately €832M). With globalisation at the centre of every major change in the economy, Stenn offers a platform that helps players in this globalisation drive gain access to financing.

The past few years have seen globalisation reach a fever pitch where every company now operates across borders and in order to keep up with this change, the manufacturing and logistics sector has also evolved. While it is easier for product companies to raise capital, Stenn has built a platform that helps players in the supply chain get access to capital.

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Stenn wants to be the go to platform for SMEs seeking capital

A research from Accenture shows that SMEs currently face a global financing gap of $3.6T. This gap is expected to rise to $6.1T within the next three years. With SMEs responsible for more than a quarter of global trade, the research shows that these businesses have struggled to access financing despite their major role in global trade.

The lack of access to easy financing has restricted the growth potential of these small and medium enterprises. Stenn was founded in 2015 to solve this very problem and has provided over $6B of financing to SMEs in over 70 countries since its inception. It has helped SMEs from sectors such as retail and IT services to access financing, and its platform has financed over $1B of transactions to date in 2022.

“A lack of access to finance is stunting the growth of SMEs around the world that are engaged in international trade. At Stenn, our purpose has always been to level the playing field for global SMEs, helping to plug a multi-trillion-dollar financing gap by connecting these businesses with low-cost institutional capital,” founder and CEO Greg Karpovsky says.

Karpovsky attributes this gap in financing to the fact that SMEs still rely on traditional banking systems for financing. His observations are inline with a Mambu report from last month, which showed that 67 per cent of SMEs are unable to secure sufficient funding and this has led to lower job creation.

A big data platform to solve financing gap

With more than 20 years of experience in digital trade finance, Karpovsky feels there is not enough being done to use technology to facilitate finance to SMEs who are unable to get finance from traditional systems. Stenn has built a proprietary technology platform that uses big data analytics and algorithms tailored to analyse credit, fraud and compliance risks.

According to TC, Stenn essentially looks at datapoints like the revenue being generated by the company and expenses based on invoices. The platform matches those data points to 1,000 other factors to determine the eligibility of a SME for a loan of up to $10M and also taps a network of institutions and big lenders to provide the capital for the financing.

Karpovsky adds, “Our proprietary platform and data analysis de-risks the process for our banking partners and provides a quick, simple and low-cost solution for SMEs.”

Stenn is able to provide cross-border capital to SMEs within 48 hours and is able to tap some of the largest financial institutions in the world for financing. The startup also manages allocation of funds and has been named one of Europe’s top-ten fastest growing fintech businesses with revenue doubling over recent years.

Investors

The funding is largely coming from a single US investor, the US private equity firm Centerbridge. The US investor is valuing the startup at $900M and backing Stenn’s platform to provide SMEs with accessible capital as they leverage the digital economy to grow their business. Stenn plans to use the funding to support marketing, product development, and hire global talent.

There are a number of fintech players trying to cater to the needs of small businesses left unbanked. There are even loan platforms and neobanks catering to domestic SMBs, but Stenn is specifically addressing companies running operations that support the larger supply chain ecosystem and Centerbridge sees value in such an operation.

Jed Hart, Co-Head of Centerbridge’s European business and Senior Managing Director, says, “We have been impressed with Stenn’s disruptive approach to addressing the challenges of global trade finance supply and believe that Stenn has a highly scalable proposition. We are excited to be partnering and supporting Stenn’s growth at an important time in its evolution and during a period of uncertainty in the world.”

“We are excited to be partnering with an investor of Centerbridge’s calibre and vision. Their funding will enable our next chapter of growth, allowing us to capitalise on our first-mover advantage whilst continuing to meet surging customer demand as we scale our team and proposition,” adds Karpovsky.