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  • Investments
  • 07 June 2022
  • 2 min read
  • Words: Northzone

Our investment in Defacto: the embedded B2B BNPL opportunity

Today, we are excited to announce our investment in Defacto, on a mission to become Europe’s largest API-first B2B lending platform. After announcing Dalma, Homa Games and Stonly, we’re on a roll adding French portfolio companies!

We have led this €15M Series A round with participation from existing investors Headline and GFC, as well as several angels from leading tech companies such as Thibaud Elzière (founder of eFounders), Rodolphe Ardant (founder and CEO of Spendesk), Didier Valet (former deputy CEO at Societe Generale), and Victoria Van Lennep (founder of Lendable).

For years, BNPL companies have been servicing consumers, creating a new and vast business category with the likes of our very own Klarna being valued at $47bn and used by millions of users around the world, providing an alternative to expensive and slow consumer loans at the point of sale. We believe that the same powerful value proposition should exist for B2B and Defacto is here to provide it.

Defacto provides easy access to loans and credit to SMEs via its embedded finance platform. Its API-based product enables third parties such as marketplaces, e-commerce platforms, and fintechs to embed lending products directly into their own products and platforms; without Defacto, this entire process remains manual, slow, and costly, for buyers and sellers alike. Many businesses that were historically locked out of this sort of funding due to scale can now get funding at point of purchase or sale. By being API-led, Defacto taps into the trend of B2B commerce moving from offline to online, transacted through marketplaces and platforms. Defacto’s API-led solution enables these platforms and marketplaces to quickly and easily offer finance to buyers and sellers, which is often key to facilitating commerce in a b2b environment.

Defacto’s product is being rolled out across Europe after a successful launch in France in 2021 and the deployment of €30M in lending. With this round, Defacto will also extend its lending capacity up to  €400M and will be available in Germany, the Netherlands, Belgium and Spain over the coming days. With rising interest rates and supply chain pressures on small businesses, Defacto serves a much-needed segment of the market that has been overlooked by traditional players. 

We are delighted to partner with Jordane Giuly, Morgan O’hana, and Marc-Henri Gires. We have been highly impressed by their ambition, technical ability, complementary skill sets and prior experience, in particular at Spendesk, where Jordane and Morgane helped grow the business to achieve unicorn status. We are confident that they and the rest of the Defacto team have the skills to achieve great success.

“B2B commerce is significantly larger than B2C commerce and most of the solutions for buyers and sellers around checkout financing have to date been relatively analog, with limited technology penetration. As B2B commerce undergoes significant technology development, manifested in ways such as the explosion of B2B marketplaces API-led checkout solutions such as Defacto have the potential to be at the forefront of these market developments, solving significant problems for both buyers and sellers.” adds our partner Kilian Pender, who will join Defacto’s board as part of the round.