Previse, which opened a Glasgow operations base earlier this year and also has a presence in Edinburgh, has raised the funding from European investor Augmentum Fintech and US venture capital firm Bessemer Venture Partners along with other backers.
The Series A funding will help scale Previse’s payment technology business to meet demand with a number of new staff to be recruited in Scotland.
Previse has developed a system using machine learning which enables major companies to pay suppliers instantly on receipt of an invoice.
In return for instant payment a small fee is paid by the supplier which Previse receives a share of.
Paul Christensen, co-founder and chief executive of the London-based firm, said it had seen huge interest from customers since launching just over a year ago.
“Among chief financial officers at large corporations, there is a real understanding of the huge inefficiencies in the current business to business (B2B) commerce model and a desire for a solution. With this funding, we will be able to grow our model to meet this demand and ensure that every supplier in the world has the option to be paid instantly.”
Previse estimates that slow payments caused by inefficient payment terms cost the world’s businesses some $300 billion every year.
It argues that paying slowly costs large buyers, because a supplier’s expensive cost of borrowing is priced into the cost of the goods or services supplied. Large buyers are also perceived to be taking advantage of their suppliers through delays to payment and are facing a growing public and political backlash as a result.
Tim Levene, chief executive at Augmentum Fintech which has invested in businesses including Zopa, Interactive Investor and Seedrs, said: “When we are selecting fintech companies to invest in, as well as looking for new, highly scalable business concepts, we are also looking for an extraordinary management team. Previse has bought together a talented, resilient and dynamic team with world-class expertise in trade finance, data science and technology. This is exactly the team to bring instant payments to the world of B2B commerce.”
Previse set up a base in Glasgow in January with an £800,000 grant from Scottish Enterprise to create 37 new jobs. It has also a data science operation in Edinburgh.
Since moving into Scotland it has already established relationships with The Data Lab and the University of Strathclyde.
It has been estimated that the fintech sector could create up to 15,000 new jobs across Scotland over the next decade.