Fintech Firm Behalf Raises $100M To Expand B2B ‘Buy Now, Pay Later’ Option

Behalf, an Israeli provider of in-purchase financing solutions for US business-to-business (B2B) sellers and buyers, announced on Wednesday that it raised $19 million in new venture financing, and created a new debt facility totaling up to $100 million provided by funds managed by Ares Management Corporation. 

The venture funding round was led by existing investors MissionOG, Viola Growth, Viola Credit, and Vintage Investment Partners. New investors Migdal Insurance and La Maison Partners also participated in the round, according to the company’s statement.

Previous investors in Behalf include financial services giant Visa, months after the company raised $150 million in debt financing in 2018.

The investment in this round brings Behalf’s capital raised to $119 million, allowing the company to expand the availability of its in-purchase financing to a broader array of B2B merchants and small- and medium-business-sized business (SMB) customers while extending the capabilities of its platform.

“The B2B eCommerce market is ripe for transformation. Merchants are recognizing the opportunity to drive new revenue by deploying In-Purchase Financing,” said Rob Rosenblatt, CEO of Behalf. “At the same time, small and mid-sized businesses (SMBs) need access to affordable financing options — an evergreen challenge exacerbated during COVID,” he added.

Rosenblatt stated that even though the “US economy is improving, SMBs continue to seek financial assistance to purchase critical supplies, inventory and equipment. Oftentimes they lack the requisite spend capacity on their personal or business credit cards. By offering In-Purchase Financing with flexible terms, B2B merchants can increase average order size by as much as 50-80 percent while reducing their risk, improving cash flow and driving operational efficiencies,” he explained.

Behalf’s solution provides B2B merchants with consumer-focused “By Now, Pay Later” offerings along with other capabilities tailored to B2B commerce, such as seamless checkout to enhance customer loyalty, easy integration with existing point-of-sale systems to avoid disruptions, incorporation of scoring models to address the complexity and risk of SMB lending, ability to serve the needs of business customers of various sizes, financing transactions of greater average order value, and sharing best practices with other B2B merchants, the company said.

Migdal’s Deputy CEO and Chief Investment Officer Guy Fischer said that they are pleased to invest in Behalf’s current round. “This investment is made out of our $1.5 billion internal FinTech fund and is in line with our strategy of investing in FinTech companies that have robust growth potential. This injection of capital should support a steep growth curve for the company,” Fischer added.

“We think there is a great market opportunity for a B2B offering targeting the more complex, real-time financing needs of SMBs,” suggested Jeffrey Kramer, Partner and Head of ABS in the Alternative Credit strategy of the Ares Credit Group. “We are excited to provide a debt facility that will help support the company to achieve its growth objectives,” he said.

Behalf was founded in 2011 and is based in Ra’anana, Israel and New York City.