Foreign exchange technology start-up Kantox, which provides a business-to-business matching platform, has raised $11 million via a financing round among existing investors: Partech Ventures, IDinvest Partners, Cabiedes & Partners and a number of business angels.
The company, founded in 2011, says that it didn’t invite others to participate in the funding round because it wanted a fast outcome, in order to dedicate time to its clients and not to a “six-month long road show”.
It did attract a high-profile investor: Patrick de Nonneville, a former Goldman Sachs co-head of European interest rates products. De Nonneville left Goldman in December 2014 and the following month joined Lendix, an online marketplace for business loans, as chief operating officer. Earlier this month he joined the board of Kantox as a non-executive member.
Kantox plans to use the funds to extend its services beyond Europe in its quest to be “the” alternative FX market, contributing to “profound, long overdue changes in the banking world”.
Speaking to Profit & Loss, Philippe Gelis, CEO, says that Kantox will consolidate its business in Europe this year and then look at expanding into another region in 2016. But the decision of whether to move into Asia or the US has not yet been taken.
“They are both big markets, but the regulations and local currencies are very different. So this is a decision that we still have to make,” he explains.
Kantox currently has 1500 small and medium-sized enterprise (SME) clients, an increase of 275% since January 2014. Gelis believes that the B2B FX platform’s popularity has grown alongside the rise in alternative finance.
“Since the financial crisis many SMEs are looking at – and have a big appetite for – alternative finance. They don’t consider banks as partners any longer, but instead view them as suppliers. And when they have an alterative with more transparency and better prices, then they are keen to use it,” he explains.
In addition, he believes that alternative financing world is gaining visibility and credibility. “Businesses that even two years ago would have remained with their bank are now willing to move fast to alternative finance. Plus, I think we have done a good job in the past 12 months in terms of onboarding many new clients and retaining existing clients, which is very important in business.”
Kantox’s clients are mainly SMEs with less than $1 billion in turnover. They operate across 20 industry sectors. The company’s blog claims that more than 250 bankers or brokers have registered on its platform to find out details about its FX platform and services. “Yes, we know who you are and we enjoy your snooping around,” it says cheekily.
Earlier this month, Kantox closed its largest-ever single trade of $33.67 million. To date clients have made $1.54 billion worth of FX transactions on the platform. Gelis expects that the total trade volume will hit the $2 billion mark by September/October this year.
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