40Seas raises $111mn to improve cross-border trade financing
40Seas, an Israeli fintech platform for cross-border trade financing, has raised US$11mn in seed funding and secured a parallel US$100mn credit facility.
The funding sees the fintech startup emerge from stealth, with the seed funding led by Team8 alongside ZIM Integrated Shipping Services, which also provides the credit facility. 40Seas says the capital will allow it to deliver a much more efficient and cost-effective financing framework for SMEs involved in global commerce.
According to the Organization for Economic Cooperation and Development (OECD), SMEs account for nearly 45% of cross-border trade volume – yet they are seven times more likely to be denied access to trade financing compared with large multinationals. A host of financing-related issues have historically undercut SME trade, 40Seas says, including siloed banking jurisdictions, working capital constraints, trust issues, legacy processes, interest rate gaps and FX volatility. It says the recent market downturn and rising cost of capital has put additional pressure on SMEs engaged in global commerce.
40Seas leverages AI and data-driven technology to extend flexible payment options to SMEs and extend the accessibility of working capital for SME importers, exporters, freight forwarders and sourcing agencies.
The company, which is based in Tel Aviv, went live with a soft launch in October 2022. Since then, it has financed transactions for dozens of SMEs and is slated to finance tens of millions of dollars in the coming months. The startup boasts a wealth of experience among its ranks – including former senior positions at Payoneer, PayPal, Dell, Citibank and Commerzbank.
40Seas brings ‘much-needed digital financing solution’
Eyal Moldovan, Co-founder and CEO of 40Seas, says: “As a kid working in my father’s warehouse, I recall watching him routinely struggle with suppliers and banks to get extended payment terms and financing for his import business. In the 25 years since, the trade financing landscape hasn’t evolved in any meaningful way or kept pace with the needs of SMEs operating in the digital era. Given today’s harsh macroeconomic conditions, now more than ever, SMEs need easy access to financing to have the best chance of survival. 40Seas wants to drive a sea change in how companies access finance, with a unique solution that makes life easier for importers and exporters, serving both directions of a cross-border trade.”
Eli Glickman, President and CEO of ZIM, adds: “With our significant investment in 40Seas, we continue to advance disruptive technologies to promote digital innovation in the shipping industry, while developing additional streams of revenue that complement our core shipping business. We are thrilled to partner with Team8, one of Israel’s leading and most innovative venture groups, on this groundbreaking initiative, which we will also soon offer to our customers worldwide, initially via our digital freight forwarder, Ship4wd. Importantly, with this strategic cooperation, 40Seas will be able to leverage ZIM’s in-depth knowledge of cross-border trade and our close relationship with the market and global SME customers to bring this advanced, much-needed digital financing solution to the market.”
Rakefet Russak-Aminoach, Managing Partner at Team8, continues: “Amidst challenging economic conditions and a fractured global supply chain landscape, now more than ever, SMEs need more streamlined and flexible ways to access financing. Team8 is extremely proud to have partnered with the 40Seas founding team and we are thrilled to have supported their mission to simultaneously accommodate the financing and cash flow needs of importers and exporters. By participating in the investment round, ZIM, a multi-billion dollar industry heavyweight, has provided a major stamp of validation and confidence in the 40Seas solution.”