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Finnish SME lending marketplace secures €3m funding ahead of full UK launch

Trading platform AREX, which allows SMEs to sell their unpaid invoices for money lending, has announced it has raised a six-figure funding round ahead of its launch in the UK next year.

The Finnish FinTech firm has drawn €3m (£2.7m) backing from investment firm Lifeline Ventures, and Robin Klein, co-founder of London investors LocalGlobe.

AREX, which already has offices in London, Helsinki and Barcelona, looks to give smaller businesses who lack fixed assets access to finance options, secured against unpaid invoices without the need for intermediaries.

The firm claims that its automated and algorithm-based platform allows businesses to set their own prices for their invoices, particularly useful for firms reliant on intangible subscription-based services.

Meanwhile, entirely automated features such as credit checks mean that the company takes only 0.25% per invoice, as opposed to the significant cut often taken by middlemen.

Chief Executive Officer at AREX Kim Forsman explained: “The factoring industry – already a $2tn market globally - is one which has remained largely manual and little-changed by technology, with SMBs obliged to sell their invoices via intermediaries at hugely disadvantageous terms.

“By building a live, automated and algorithm-based trading platform, where companies can set their own prices for their invoices, AREX is enabling both SMBs and the larger corporates who use our exchange to instantly turn their unpaid invoices into cash.”

Founded in 2014, the company’s senior management includes former Skype and JP Morgan workers, and is part of the new generation of alternative lenders which have arisen in the last ten years in an attempt to rectify the increasingly tricky lending environment for SMEs.

Co-founders Perttu Jalkanen, Hannu Krosing and Nikolai Hentsch have already launched the platform in Finland and will now use this new funding round to launch the service in the UK in early 2017.

Robin Klein of LocalGlobe, which has invested in some of the UK’s biggest tech startups in recent years, believes AREX represents a great example of the strength of the Nordic FinTech sector.

He said: “AREX are yet another example of the ambition and brilliance of execution so evident in the Nordic fin-tech sector right now. They are a team with proven pedigree and a huge mission in a market that’s poised for enormous change – and we’re very excited to be working with them.”

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