Aluna Partners arranges an up to $7 million asset-backed lending facility with Flow48
“In the realm of developed economies, SMEs are the cornerstone, accounting for around 99% of all firms, generating 70% of jobs, and contributing to half of the GDP. Their critical role highlights their essential contribution to the global economy, yet SMEs face significant hurdles in securing capital due to the stringent and somehow obsolete conditions imposed by conventional banking, including demanding collateral requirements, the need for a lengthy financial history, and a general risk aversion,” said Idriss Al Rifai, CEO at Flow48. “These challenges underscore a clear working capital trap for SMEs, an issue that fintech companies can solve through innovative solutions.”
Aluna Partners, a global investment banking firm with expertise in arranging alternative credit, announced that it has agreed to purchase up to $7 million of receivables from Flow48, a fintech company based in France but with operations in the UAE. Under the terms of the agreement, Flow48 can draw down up to $7 million in the next 24 months to finance its loan book expansion. This debt facility was designed to complement the recently closed $5 million Series A round led by tier-1 European fintech investors.
Flow 48 is a fintech company that offers working capital financing to SMEs in the UAE. Flow 48 uses its proprietary platform to consolidate multiple streams of data to arrive at a more accurate credit scoring assessment of its clients. By gathering data from payment gateway providers, enterprise resource planning systems, KYC and AML service providers, and its clients’ financial reports, Flow 48 can provide tailored financing solutions to SMEs which historically have been underserved when it comes to working capital financing.
“In the realm of developed economies, SMEs are the cornerstone, accounting for around 99% of all firms, generating 70% of jobs, and contributing to half of the GDP. Their critical role highlights their essential contribution to the global economy, yet SMEs face significant hurdles in securing capital due to the stringent and somehow obsolete conditions imposed by conventional banking, including demanding collateral requirements, the need for a lengthy financial history, and a general risk aversion,” said Idriss Al Rifai, CEO at Flow48. “These challenges underscore a clear working capital trap for SMEs, an issue that fintech companies can solve through innovative solutions.”
Flow 48 is spearheading this transformation, employing a data-driven strategy that gathers a multitude of alternative data sources. Their platform's integration with most of the ERP systems, payment gateways, e-commerce platforms, as well as open banking solutions, feeds into their proprietary underwriting engine. This approach differs from that of traditional banks mostly relying on balance sheet metrics, while Flow 48 instead focuses on cash flow-based analytical credit scoring to more accurately evaluate SME creditworthiness and facilitate capital provision. Flow 48 is seeking to build a portfolio of SME revenue and invoice-based loans, primarily in the UAE.
“Flow 48 has a track record of raising equity capital from tier-1 fintech venture capitalists from Europe,” said Stefano Sciacca, Managing Director at Aluna Partners. “Flow48 has raised about $8.0 million in equity capital since inception and has recently announced the closing of a $5.0 million Series A round. We believe that the arranged debt facility complements the Series A, allowing the company to rapidly scale in the region.”
"We are very happy to partner with Aluna in this next stage of our development. Their access to capital and our ability to underwrite SMEs in a new and innovative way is, we believe the recipe for a successful partnership," added Idriss Al Rifai, CEO of Flow48.
Aluna Partners is an experienced arranger in the fintech sector, with over $100 million arranged in 2023.
Aluna Partners, a global investment banking firm with expertise in arranging alternative credit, announced that it has agreed to purchase up to $7 million of receivables from Flow48, a fintech company based in France but with operations in the UAE.
