40Seas raises $111 million to improve cross-border trade finance
40Seas, an Israeli fintech platform for cross-border trade finance, has raised USD 11 million in seed funding and secured a parallel USD 100 million credit facility.
The funding sees the fintech startup emerge from stealth, with seed funding led by Team8 alongside ZIM Integrated Shipping Services, which also provides the credit facility. 40Seas says the capital will allow it to deliver a much more efficient and cost-effective financing framework for SMEs involved in global trade.
According to the Organization for Economic Co-operation and Development (OECD), SMEs account for almost 45% of cross-border trade volume – but are seven times more likely to be denied access to trade finance than large multinationals. A number of funding-related issues have historically undermined SME trading, 40Seas says, including defunct banking jurisdictions, working capital constraints, trust issues, legacy processes, interest rate gaps and currency volatility. It says the recent market downturn and rising capital costs have put further pressure on SMEs engaged in global trade.
40Seas leverages AI and data-driven technology to extend flexible payment options to SMEs and expand the availability of working capital for SME importers, exporters, freight forwarders and purchasing agencies.
The company, which is based in Tel Aviv, went live with a soft launch in October 2022. Since then, it has funded transactions for dozens of SMEs and is slated to fund tens of millions of dollars in the coming months. The startup has a wealth of experience among its ranks – including previous senior positions at Payoneer, PayPal, Dell, Citibank and Commerzbank.
40Seas brings ‘much needed digital financing solution’
Eyal Moldovan, co-founder and CEO of 40Seas, says: “As a child working in my father’s warehouse, I remember watching him routinely struggle with suppliers and banks to get extended payment terms and financing for his import business. During the 25 years ago , the trade finance landscape has not evolved in any meaningful way or kept pace with the needs of SMEs operating in the digital era.Given today’s tough macroeconomic conditions, now more than ever, SMEs need easy access to finance to have the best chance of survival 40Seas wants to drive change in how companies access finance, with a unique solution that makes life easier for importers and exporters, serving both directions of a cross-border trade.
Eli Glickman, President and CEO of ZIM, added: “With our significant investment in 40Seas, we continue to advance disruptive technologies to drive digital innovation in the shipping industry, while developing additional revenue streams that complement our core business. We are excited to partner with Team8, one of Israel’s leading and most innovative venture groups, on this ground-breaking initiative, which we will also soon offer to our customers worldwide, first through our digital freight forwarder, Ship4wd.Importantly, with this strategic collaboration, 40Seas will be in able to leverage ZIM’s in-depth knowledge of cross-border trade and our close relationship with the market and global SME customers to bring this advanced, much-needed digital financing solution to market.”
Rakefet Russak-Aminoach, Managing Partner at Team8, continues: “Amidst challenging economic conditions and a fragmented global supply chain landscape, SMEs now more than ever need more streamlined and flexible ways to access funding. Team8 is extremely proud to have partnered with 40Sea’s founding team and we are thrilled to have supported their mission to simultaneously address the financing and cash flow needs of importers and exporters.By participating in the investment round, ZIM, a multi-billion dollar industry heavyweight, has put an important stamp on validation and confidence in the 40Seas solution.”
