Jenfi, a growth-capital-as-a-service platform, can provide online businesses with revenue-based financing within a day. The Singapore-based startup announced today that it has raised $6.6 million in pre-Series B funding, led by Headline Asia. Participation came from returning investor Monk’s Hill Ventures, who led Jenfi’s Series A two years ago, ICU Ventures, Granite Oak, Korea Investment Partners & Golden Equator Capital and Atlas Ventures.
Since Jenfi was founded four years ago, it has committed more than $25 million in non-dilutive capital to approximately 600 companies. Clients include Gushcloud, Ralali, Hello Health, Lamer Fashion, Buy2sell and Mystifly. The new funding will be used to expand the customer base in Singapore, Vietnam and Indonesia and expand into new markets in Southeast Asia such as Malaysia, the Philippines and Thailand. It also allows Jenfi to fine-tune its credit underwriting and risk assessment capabilities, including its proprietary risk assessment engine.
The fintech was founded in 2019 by Jeffrey Liu and Justin Louie, who left their previous startup, fitness marketplace GuavaPass, when it was acquired by ClassPass. Jenfi’s “growth capital as a service” model was developed after the two realized that online business owners, such as e-commerce, SaaS, and consumer technology vendors, often struggled to get capital to fund their growth expenses of traditional financial institutions.
Companies applying for Jenfi can receive funding from $10,000 to $1 million to spend on marketing, inventory, and growth campaigns. Liu told MinRegion that total revenue generated by companies in Jenfi’s portfolio now exceeds $150 million.
Decisions about which companies to lend to are made with Jenfi’s proprietary risk assessment engine, which integrates with data sources such as accounting software, payment gateways, e-commerce platforms, online marketplaces, and digital advertising. This allows Jenfi to continuously monitor its borrowers’ business activities, including sales growth and marketing return on investment.
As Jenfi grows, it adds more local market data sources, including Haravan sales management platform and POS management software KiotViet in Vietnam, and nearly all banks in Singapore, Vietnam and Indonesia.
Jenfi’s proprietary risk engine is one of the key ways it differentiates itself from other companies offering income-based financing to digital-native businesses, Liu said, because it means more comprehensive credit ratings and tailored financing solutions.
Since announcing the Series A, Jenfi has deployed its first machine learning-assisted underwriting system, which Liu says can make underwriting decisions faster, with greater accuracy and with less human intervention.
In the future, Jenfi will work with synthetic data to better understand customer behavior and possible future outcomes. The company also plans to develop a technology platform that will allow third parties to use its own scoring models in their own native infrastructure.
Another way Jenfi sets itself apart from competitors is the flexibility of its repayment plans, Liu said. They range from three to twelve months and are designed flexibly, taking into account the needs of each company. Refund amounts are based on a predetermined percentage of sales, but that varies widely depending on the business type. For example, a high-margin software company may get a higher revenue share percentage than companies in another industry.
The total amount of fees a company pays depends on the credit score generated by its own risk engine. Liu said the rates are transparent and competitive, with no hidden fees or surcharges.
Jenfi’s near-term plans include offering growth capital to more clients through the use of dynamic limits, which can be adjusted based on client needs and creditworthiness. It will also launch an on-demand financing product to cover recurring growth capital needs, such as variable monthly advertising spend.
In a statement, Headline Asia partner Aki Okamoto and director Jonathan M. Hayashi said: “We have been conducting ongoing research into revenue-based finance and have spoken with nearly every player in this space in Asia. Jenfi definitely caught our eye. Their technology, product, operation and traction are significantly better than their competitors.”