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C2FO raises another big round of capital

Leawood, Kansas based C2FO raised $200 million last week from a variety of investors, including SoftBank. This fundraising caused the valuation of the company to move over $1B – making it a Silicon Prairie unicorn.[1] C2FO is a payment management platform that helps small businesses received payment on contracts on expedited terms. Essentially, small businesses…

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Leawood, Kansas based C2FO raised $200 million last week from a variety of investors, including SoftBank.

This fundraising caused the valuation of the company to move over $1B – making it a Silicon Prairie unicorn.[1]

C2FO is a payment management platform that helps small businesses received payment on contracts on expedited terms. Essentially, small businesses working with large businesses can elect to provide a small discount on the total receivable in order to receive the payment more quickly. This structure allows small businesses more control over their cash flow management. Large businesses enjoy the benefit of getting small discounts on a variety of bills – meaning that they can leverage their cash position and payments to effectively provide a small boost in returns on cash.

In an interview with Supply Chain Dive, Kerri Thurston, C2FO’s Chief Financial Officer, said, “For the buyers it represents a reduction of cost of goods sold on their operating expense and in most cases they’re using underutilized cash that is making next to nothing in terms of interest rates for their balance sheet. So, they’re able to improve their EBITDA and their gross or operating margins utilizing existing cash.”

The company was formed in 2008 by Sandy Kemper, a long-time Kansas City entrepreneur. Today, more than 300,000 businesses across 173 countries utilize C2FO to manage their cash flow. These companies receive more than $1 billion in funding every week.

Over the years, Mr. Kemper has described the reason for C2FO being one driven by his own experiences and similarly situated entrepreneurs – who are forced to manage cash with large counterparties which do not always pay on short timelines. This led Kemper to create a platform solution that allows players on both sides to benefit from a shorter timeline on payments.

“We are very fortunate to have a team who, for years, has delivered industry-leading unit economics, extraordinary customer satisfaction, and strong global growth,” said Sandy Kemper, C2FO Founder and Chief

Executive Officer. “Due to their work, we have now grown to match over $1.2 trillion of accounts receivable and accounts payable.”

The company’s $200 million raise follows a $100 million raise approximately 18 months ago. These raises create mechanisms to both expand sales and marketing – but also to provide more cash management services on the platform. In particular, the company plans to expand its international offerings. This type of expansion was attractive to SoftBank and other investors.

“We invested in C2FO because we think their disruptive innovation offers a solution to an industry that has traditionally lacked cost-efficient alternatives for businesses of all sizes looking to free up cash quickly,” said Akshay Naheta, Managing Partner for SoftBank Investment Advisers, in a press release announcing the transaction. “We believe the company’s platform provides maximum value for buyers and suppliers and are excited by the company’s vision to become the global exchange for working capital.”

“This infusion of capital from the Vision Fund and existing investors will be used to further our expansion as we strive to build a new world wherein the increased liquidity provided by the C2FO platform helps companies and in turn, entire economies, grow more rapidly,” added Kemper. In an earlier interview with SPN, C2FO leaders had specifically identified India as a market where its platform is particularly valuable for small businesses because payment terms in India are very different than in the United States.

The investment is the largest venture capital investment in Kansas this year and according to Pitchbook, ever. It is also significant because it marks the second +$100mm investment in the Kansas City area in 2019. The other was PayIt in March – a government technology payment system.

[1] A unicorn is a privately held company that has been valued at more than $1B by a market financing.  According to Tech Crunch, there were 279 unicorns as of March 2018 – putting C2FO in fairly exclusive company.

For more information about C2FO – please visit their website at www.c2fo.com

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