After originating in the United States, Revenue Based Financing (RBF), income-based funding, is on its way to settling in France. RBF is an alternative to more traditional funding methods offered by traditional banking players. Until now, companies seeking funding could either take out a bank loan or honor credit, receive a grant, or raise equity capital. “We have seen many digital companies struggle to fund themselves. They are often denied bank loans, and venture capitalists are often reserved for the big fish.” explains Nima Karimi, CEO silver. ” Income-based funding is a complementary solution to these funding methods.”
Silvre, leader of the RBF
Silvr? Fintech, which has just raised 130 million euros, is the first French startup to launch in this niche since 2020. Now he supports over 200 digital entrepreneurs (SaaS, e-commerce, app, marketplace, etc…) thanks to its algorithm capable of predicting the future earnings of its clients. “We connect to all company data: Google Analytics, e-commerce CMS, data collection software, bank accounts, as well as advertising agencies such as Google Ads or Facebook Ads.” explains Nima Karimi.
The algorithm relies on artificial intelligence to analyze the current situation in the company, determine its future income and assign it a score. The resulting score allows Silvr to determine whether the company is solvent or not: therefore, the process of making a decision on financing is automated.
Thus, Silvr allows its customers to receive from 10 thousand to 10 million euros within 24 hours. “On average, the first funding is 300,000 euros.Nima Karimi says These funds allow them to, for example, fund their promotions, their digital marketing campaigns, or pre-fund monthly subscriptions to SaaS platforms. They are also non-dilutive, so the company can keep all of its capital.
Income-based financing is still a very new method of financing: “When we started in 2020, the market was in its infancy in the US and did not exist in Europe. Today it is thriving in the United States and showing up in Europe.” analyzes Nima Karimi.
An unprecedented partnership between the bank and Silvr
In March, Banque Populaire Rives de Paris and Silvr signed a business services agreement. “The goal is simple: to offer our customers the Silvr offering so they can benefit from it.” explains Sophie Magne, Innovation Business Market Manager.
Several reasons prompted the bank to initiate this partnership:We want to continue to offer the best solutions for our customers. This partnership allows us to enrich our offering with an additional solution based on a predictive model, which allows our clients to test their economic model and finance it.” adds Pierre Tastet, Deputy Managing Director of Banque Populaire Rives de Paris.
A partnership that has a number of advantages for technology companies that are clients of the bank. First, the possibility of financing is very fast, within 24 hours. This funding is revolving to keep the business going as needed. “On average, we refinance our clients every three to four months to accommodate their growth.Nima Karimi says
However, to take advantage of this funding, you must meet two eligibility criteria. The Silvra algorithm needs data to make predictions. Therefore, it is necessary that the company has existed for at least one year and has already recorded a turnover of 100,000 euros.
Banks and fintech: competitors or allies?
Fintechs are startups that are changing the rules of banking and finance. As such, they are often perceived as competitors of historical players. The reality is more subtle, though, as evidenced by the partnership between Banque Populaire Rives de Paris and Silvr.
“Fintechs are both a source of competition and complementarity.explains Pierre Tastet. On the one hand, competition stimulates our ability to innovate. On the other hand, some startups like Silvr are way ahead in their field. Therefore, it makes sense for us to rely on their technology to keep up with delivering solutions to our customers.“. A vision shared by Nima Karimi, Head of Financial Technology: “We do not see ourselves as competitors of banks. On the contrary, we come to offer companies an offer that is added to the offer of banks.“.
“Apart from our obvious complementarity in terms of funding, we had excellent contact with Nima and Gregory, the two founders of Silvr. These relationships have greatly contributed to the establishment of our partnershipPierre Teste says. With this partnership, which is a first for Silvr, the banking leader wants to support innovation above all else. “It is important for Banque Populaire Rives de Paris to surround ourselves with local players in order to contribute to the development of our territory and its members.“concludes Sophie Magnier.
Maddyness, media partner of Banque Populaire Rives de Paris