The e-commerce market is on track to bring in over $5 billion in revenues this year, which speaks to how much consumers are shopping online and how many businesses are out there. Today, a startup from Gothenburg, Sweden called Juni is announcing $206 million in funding, a $100 million Series B and a further $106 million in debt, to build out an e-commerce focused neobank, designed specifically to cater to that growing group of retailers with tools to help them
The $100 million equity round was led by Mubadala Capital. The $106 million in debt funding will be used to fuel its credit products.
The company closed off its Series A in October of last year and has been on a very strong pace of growth. Actual customer numbers weren't given. Sources close to the company tell me that it is in the $800 million range.
The majority of banks target small and medium businesses. There is a gap in the market that Juni identified and built to fill, that is unique to the needs of e- commerce businesses.
Huge incoming and outgoing sums can be found in the accounts of e- commerce businesses. They do business in many countries. In addition to potentially selling across a number of platforms and marketplaces, they use a number of other digital tools to run and to grow their operations.
El-Sabini and his co-founding partners had experience working in digital businesses where they saw them.
The kind of incomings and outgoings e-commerce companies have are the kind of incomings and outgoings that Juni caters to. There are 2,400 integrations with tools on the platform that companies could potentially use for their accounting, digital advertising, and more.
Juni has narrowed its scope in the last year, even though that sounds like a very large product. The company initially launched to cater to both e-commerce retailers and digital marketers, since the latter group has a lot of the same dynamics, spending money in multiple countries and using a variety of marketing and advertising tech. It has shifted its focus to the e-commerce vertical and the marketing that they do.
El-Sabini said that they were focusing on e- commerce companies. Marketing is an important function.
There were a lot more consumers buying a lot more online, and e-commerce companies were scrambling to connect with and sell to those audiences without going bust, so having a banking partner that could assist in that was part of the windfall.
As you might have expected, that need doesn't go away as the epidemic ends. E- commerce companies have to manage that because growth in that sector is slowing down and will continue to do so for the next few years.
Cash flow is king for these customers and we can offer credit with great insights into their forecasting so they understand the cash flow. Fear in the markets is something we see as well. It's very important if you can have a partner that can help you understand your position. We want to have good relations with our customers.
Fatou Bintou Sagnang, the partner who led the investment, said that Mubadala Investment Company is a prolific fintech investor.
She said in an interview that they looked for companies that fit that thesis. Companies that use tech in smart ways are our favorites. She said they got to know the young Juni and liked its focus on e- commerce. There are a lot of similarities between Brex in the US and Brex in France. We have experience doing this for sectors and our thesis is that the next iteration will be more verticalization.
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