Growing a business comes with its own inherent challenges, and keeping the company’s finances in order is key to overcoming many of them. Companies that work with other businesses rely on timely invoice payments from customers to ensure their financial growth stays on track. With small businesses in mind, Atlanta-based fintech startup Now Corp. developed a solution to help manage these B2B invoice payments, and it announced Thursday a fresh capital raise to expand its reach.
Co-founded by Stacey Abrams, a former member of the Georgia House of Representatives, Now aims to help small companies get paid faster. Similar to a credit card, the company’s NowAccount solution allows businesses to receive payments as soon as one day after providing goods or services to another company. Once a business invoices their client and uploads that invoice to their NowAccount, Now charges a one-time service fee and pays the business the amount of the invoice.
Typically, B2B invoice payments take several weeks or months to process, but Now gives a business’ client the option to pay invoices within a 30- to 90-day window. The business’ client pays the business like they normally would and then remits the payment to a lockbox or their own account with Now.
“Since the start of the pandemic in spring of 2020, Now has seen increased demand for our services as customers have roughly doubled the length of their payment terms with their suppliers, meaning companies are taking nearly twice as long to pay and suppliers are waiting twice as long to be paid,” Now CEO and co-founder Lara Hodgson told Built In via email. “During times of uncertainty, small businesses do not need the cost and risk of adding debt or using factoring. With NowAccount they are paid their actual revenue faster so they can stop being a free bank to their customers.”
The startup closed on a $25 million credit facility from Brigade Capital Management and a $4 million equity investment co-led by Brigade Capital and Virgo Investment Group. The new equity funding enables Now to scale its operations and build out its suite of product offerings, and the credit facility will go toward extending its service to more small businesses. This raise builds on the company’s $9.5 million Series A back in June.
Now has seen significant growth of its platform, having facilitated more than $700 million in invoice payments over the past decade for more than 1,000 small businesses. Today, it’s planning to fuel even more growth. Alongside the financing, Now announced the addition of Sejal Shah Gulati as its new chief growth officer as the company continues to scale and pursues national expansion.
Now is continuing to build out its 25-person team with plans to hire across every sector, according to Hodgson. Available roles will span Now’s customer success, marketing and technology teams.