Lending startup Timelio has secured a funding agreement with investment manager Carnbrea & Co, to help facilitate business lending and grow its platform.
Carnbrea & Co is investing through its Global Ethical Income Fund — backed by superannuation investors — and the funds will be distributed via Timelio to eligible businesses.
Speaking to StartupSmart, Timelio co-founder and chief executive Charlotte Petris said she was not able to disclose the value of the funding, but noted it’s something of a unique funding method.
“I’m not aware of any other marketplace that has taken this kind of funding,” she says.
Founded in 2015 by Petris and her husband Andrew, Timelio is an online marketplace for invoice finance, allowing businesses to source financing to cover outstanding invoices by matching them with investors.
In October 2015, the startup secured an initial $500,000 in funding, and in 2016 it raised a further $5 million, with investors including Thorney Investment Group and former ANZ board director John Dahlsen.
The funding from Carnbrea & Co will be used to directly fund businesses through the Timelio platform, Petris says.
For the startup, gaining access to funding in this unusual way is a strategic move. New lines of funding allow the startup “to get scalable growth without relying on traditional forms of funding”, she says.
“That’s our competitive advantage,” she adds.
Rather than equity or debt funding, this facility “ensures we can grow”, Petris says, while providing customers with “the best offering in the market with the least restriction”.
“We can provide a lot more flexibility in the types of businesses we fund,” she adds.
Timelio’s strategy is based on providing alternative funding for businesses, including startups and small businesses all the way through to businesses turning over tens of millions of dollars.
This fund is focused on specifically on ethical, environmental, social and governance investment, meaning it’s not pegged for the likes of tobacco or gambling businesses, Petris says. However, she’s not able to elaborate on the kinds of businesses she is looking to fund with the cash.
That said, she says it shows investors are looking to diversify their portfolios with socially responsible investments.
Whether a business is funded through Timelio or not, Petris advises founders to consider all kinds of funding, rather than relying on VC.
Often, startups will get a one-off deal with a large corporate, and will require funding to help them deliver on that mandate, she says.
If they’re on the cusp of a growth phase, in these cases equity funding can end up being extremely expensive.
Different types of funding lend themselves to different stages of growth, she says.
“Fund the growth of the business, where you can, through working capital finance, and use equity to expand in other ways,” she advises.