Nuula, a Canadian startup, has raised $120 million in funding. This money will be used to launch its first app and product, a credit line for its users.
The funds will be in the form of $20m in equity from Edison Partners and a $100m credit facility from funds managed under the Credit Group of Ares Management Corporation.
Since June this year, the Nuula app was in limited beta. It will soon be available to all users. The startup plans to add more services as it grows. For example, business banking will be provided by third parties and will be integrated into the Nuula app in early 2022.
The roadmap includes products such as cash flow forecasting and personal and business credit score monitoring. Customer sentiment tracking is also available. Monitoring of other critical metrics, including financial, payments, and eCommerce data, are all part of the roadmap.
In an interview, Mark Ruddock, CEO of Ruddock, stated that they were building tools to complement each other in the app. Businesses can now project their cash flow and track their credit score. We monitor customers' conversations and keep track of their actions in real-time. SMBs need to be able to access all the metrics they may have gotten from multiple apps in one place.
The original idea for Nuula came from BFS. BFS was a small company that specialized in small business lending. In order to make more money, the company began to explore the possibility of using data to create a wider range of services to address the same market segment. BFS became a significant business on its own (and had raised $184 million from Edison & Honeywell). Management realized that data and the concept of a super-app would be crucial to growing the business. So it rebranded earlier in the year and launched the beta version of the app.
Nuula's ambitions are in line with a larger trend in the market. In the fintech world, small and medium businesses have emerged as a major business opportunity over the past few years. SMBs were long ignored in favour of building solutions for large consumer markets or lucrative large enterprises. But, they have shown that they are ready and willing to invest in newer and better technology to run their business. This has led to a surge of startups and larger tech companies offering services to this market.
Super apps are another area of interest in fintech. However, most of the information we have heard about in this area is aimed at consumers and does not reflect the innovation rut Nuula wants to break.
Ruddock stated that despite the increase in SMB-focused services, it still lacks innovation when compared to enterprise or consumer services. We felt there was a lot of opportunity to innovate in the market. This app will be the one that SMBs want to use every day, as it provides useful tools, insight, and capital to help them grow their businesses.
Nuula's focus on building data services to connect everything is in line with the way that many neobanks also invest in services and develop their unique selling points. It is a simple theory that banking services are commoditized and, therefore, commoditized. Companies will see more value from innovating with data-based insights and algorithms to allow their users to make the most of their resources.
This market will not be addressed by it alone. Selina, ANNA and Amexs Kabbage are some of the other companies that have built fintech for SMBs. They also include Novo, Atom Bank and Xepelin.
Nuula's credit product so far is a preview of what it intends to be. It is not just another place to borrow money or manage it. This is not a loaning service. It is linked to the customers outgoings and incomings. The credit line is only requested when it seems that it may be necessary.
Gary Golding, general partner at Edison Partners, stated that financial technology innovations have greatly democratized who can be the next big player for small-business finance. Nuula is a new type of financial services technology that small businesses can use, combining key financial performance indicators and insights in a single interface. We are very excited about the firm's potential.
We are thrilled to work with Nuula in building a unique financial service resource for small business owners and entrepreneurs, stated Jeffrey Kramer (Partner and Head ABS in the Alternative Credit strategy at the Ares Credit Group), in a statement. Innovation and new players are possible as financial technology advances. We are excited to see Nuulas team of data scientists, technologists and financial service veterans bring new small-business financial services solutions to the market.