Czech Flowpay raises €2.1M to expand its AI-based financial technology
Czech fintech startup Flowpay has raised €2.1 million in a seed round backed by Techstars – the world’s most active pre-seed investor. Czech VCs like Soulmates Ventures and DEPO Ventures, and key angel investors such as Mark Ransford, Martin Herrmann, Kartik Varma, Allard Luchsinger, also supported the company. The newly acquired investment will allow Flowpay to scale beyond the Czech Republic, enhance its technological capabilities, and offer its services to a wider range of SMEs.
“Flowpay is a prime example of a new generation of tech-driven companies that enable fast and cost-effective funding of smaller loans for the SME segment. Flowpay utilizes the power of AI to assess risk and efficiently process loans, embedding their tools in the platforms that SMEs already use for their daily operations. We have been impressed by the quality of its leadership, the robustness of its credit models, and their speed of execution. Techstars believes Flowpay has shown it has the potential to become a leader in the transformation of the SME lending landscape,” says Allard Luchsinger, Managing Director Techstars.
Flowpay in a nutshell
Flowpay is a Czech technology startup that has developed an innovative way to assess not only the risk but mostly the potential of small and medium-sized enterprises (SMEs) on which basis it provides operational financing for their growth. Using artificial intelligence, Flowpay automates the entire process from funding applications to risk scoring and evaluation. By leveraging Embedded Finance, it further enables clients to use these services where they feel most comfortable, through platforms they use every day, easing the otherwise tedious process. Unlike banks, it does not require clients to fill in unnecessary paperwork, instead connecting to point-of-sales systems, e-commerce platforms, and more. Based on this data, Flowpay evaluates the availability of financing and offers each client a customized loan to fit their needs.
The company’s founder is serial entrepreneur, investor, and finance expert William Jalloul, who started the company in 2021 with the idea to support small and medium-sized businesses that are the heart of the economy but don’t have access to capital from traditional institutions. Flowpay’s vision is to truly understand SMEs and provide them with the services and products they need to grow. Since its founding, Flowpay has become an important player in the operational finance market thanks to its innovative platform and use of AI, which enables companies to quickly and easily obtain financing based on the analysis of real operational data. Alongside six other European startups, it was accepted to the IBM fintechx program, which focuses on accelerating the adoption of generative AI in financial services. In addition, Flowpay won Technological Startup of the Year in the Vodafone Idea of the Year competition.
“Even if you have a profitable and fast-growing business, banks might still not give you a loan when you need it for something like stocking up your warehouse or investing in advertising. Banks cannot assess risk precisely and usually just look at tax returns, which are outdated and most often do not reflect reality. At Flowpay, we work with client data taken directly from their point-of-sales systems, e-commerce platforms like Shoptet, and use AI to rate their potential to obtain financing. We want to help SMEs grow with our Risk as a Service (RaaS) solution and license it to financial institutions around the world.” explains William Jalloul, founder and CEO of Flowpay.
Eyes on the future
For businesses, the loan application process is often prolonged and uncertain, which is a result of the bank sector’s slow progress in digitalization. “Flowpay solves this problem by digitizing and automating processes using accurate data. This data is available to the business by connecting to the company’s financial, accounting and business systems, forming a technology bridge between the business, the financier and possibly another party providing the data, such as a payment gateway or e-commerce platform. Flowpay is one of the pioneers of this embedded finance approach in the CEE region with a vision to become a global leader in providing financial solutions for sole traders and SMEs,” says Michal Ciffra, partner at DEPO Ventures.
Flowpay’s plans include both expansion to new markets and further technological development to better suit the needs of its clients. This investment will also allow the company to increase its capacity to provide personalized credit solutions tailored to the specific needs and capabilities of each business. The Flowpay team currently consists of approximately 15 experts, primarily from the fields of Data Science and IT, whose respective skill sets facilitate smooth and efficient operations within the company. With ambitions to continue growing and further accelerate development, Flowpay plans to expand its ranks to a total of 20 team members in the near future.
