Home Business Unit Finance reveals $ 100m raise at $ 1.2b valuation

Unit Finance reveals $ 100m raise at $ 1.2b valuation

24
0

The hot air has started to escape from the valuation balloon, but there are companies that managed to benefit from what was left in the final moments. Israeli-US company Unit Finance is a successful company with an annual revenue growth rate expected to be in the double digits by the end of the year, but it is by no means certain that in the current atmosphere it would manage to raise funds at a valuation as high as $ 1.2 billion. Fortunately for Unit, it embarked on a fund raising round in January at the instigation of one of its investors, and closed the round in late March.

Almost two months later, Unit officially announced yesterday that it had raised $ 100 million at a valuation of $ 1.2 billion.

The company’s ARR (annual recurring revenue) is growing at a rate of 30% a quarter, and in the past six months Unit has grown seven-fold in the banking metrics by which it is measured – deposits, transaction volume, end-user numbers – which apparently led its investors, among them Insight Partners, Accel, Aleph, and TLV, to give it a substantial growth premium.

Successful, fast-growing startups are currently raising funds at a multiple of 12 on annual revenue, or 15 at most. Unit, however, managed to raise funds at a multiple of at least 60, on the assumption that its growth rate will remain the same until the end of the year.

New fintech wave

A new wave of fintech companies is offering banking services directly to the customer, in what is called embedded finance, and is breaking down what we call a bank into a series of services that can be embedded in numerous ways in applications and websites.

Unit is a leading provider of embedded finance, the ability to integrate banking products into applications of other services such as a supermarket or an electronic products website. It was founded by Itai Damti (CEO) and Doron Somech (CTO), who were also among the founders Israeli trading technology company Leverate, and who noticed the sharp change in the industry.

“In the first generation of fintech companies, the focus was on one or two finance products made digitally accessible, but the banks, which had the advantages of size and power, continued to operate alongside them. In the second wave, companies in a range of fields – such as Shopify, Uber and Lyft – are launching their own financial products, “Damti told” Globes “in the past.

Unit focuses on the enterprise sector, and enables companies to offer banking services to other businesses or their employees. Through Unit, crowd funding platform AngelList started to offer startups raising money through it a package of banking services that includes a current account, credit cards, money transfers, and investment management.







For Honeybook, an Israeli unicorn that provides a software services platform for small businesses covering ordering systems, marketing, invoicing and payment receipts among other things, Unit offers banking services under HoneyBook’s brand. A small business owner who is a HoneyBook customer, can receive payments, pay wages, and transfer cash using Unit’s services under HoneyBook’s brand name.

Unit is not alone in embedding banking services. Its competitors are Israeli company Alviere, Aion Bank, Railsbank, and even traditional banks that have developed similar services. Payments giant Stripe has also entered this field, although so far without great success: its revenue from it is estimated to be a few million dollars annually.

Unit’s expertise in regulation gives it an advantage in the market: it guarantees that its customers meet the provisions of strict banking and financial regulation. It has recruited as chief compliance officer Amanda Swoverland, a senior US specialist in regulation who has worked in risk management at several large banks and fintech companies.

Published by Globes, Israel business news – en.globes.co.il – on May 18, 2022.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.


Previous articleNet Profit Beats Estimates, Lifestyle Brands Drive Sales
Next articleFlat-fee retirement investing – Moneyweb

LEAVE A REPLY

Please enter your comment!
Please enter your name here