Romanian FinTech startup Instant Factoring raises €500K seed investment

Cristian Ionescu, CEO at Instant Factoring / Photo:

Instant Factoring, the first Romanian start-up that provides flexible working capital financing for SMEs, closed a seed investment round of EUR 500,000 from investors with rich international experience, Romanian media reported. As announced, the Instant Factoring team will use the funding to strengthen their position on the market and to further develop their platform.

The round was led by several renowned international investors – Xenofon Vodorouglou, Costantin Goulimis and EDUCATIVA, a group of social enterprises with focus on the education field.

Cristian Ionescu, CEO and Chairman Instant Factoring / Photo: Ionescu’s LinkedIn profile

“The capital attracted in this round will contribute to the consolidation of our position on the local market by extending the portfolio of clients among micro-enterprises and small companies in Romania, and will be invested in the development of the online factoring platform, and of the strategic branding and digital marketing activities,” said Cristian Ionescu, CEO & President, Instant Factoring, reported.

This is Instant Factoring’s first round of private equity financing, in addition to the initial capital made by the founders in 2018 with a total value of EUR 500,000. Now, with this investment, the total capital investment reaches the value of EUR 1 million.

Founded in April 2018, Instant Factoring is enabling the development of small businesses by providing them with flexible and innovative financing solutions. They focus on companies with a turnover of up to 2 million euros. Through their factoring platform, they provide liquidity to small entrepreneurs in 24 hrs, powered by robot-underwriting, transaction transparency using the blockchain, and developing machine learning-based credit risk algorithms. The startup helps companies to turn their invoices into cash as the easiest step to getting the money they need quickly, without the burden of bureaucracy, extremely long analysis and response time.

In order to start functioning, in fall 2018, the startup took a loan of EUR 1.5 million from an American social impact investment fund, aimed to conduct the factoring financing operations and to purchase the invoices portfolios of the companies.

Instant Factoring announcement of the funding on LinkedIn

“Small companies in Romania are facing an acute lack of liquidity in the current activity, a necessity they cannot cover from other sources, and the online factoring offered by Instant Factoring is the quick and handy solution for any of them, through which they can avoid a financial bottleneck and access the much-needed capital for business development,” reads the Instant Factoring announcement of the round on their LinkedIn profile.

The company estimates that more than 15.000 small businesses will use its services by the end of 2022, with an average value of invoice financed of approximately EUR 2.000.