Atlanta-based Now secured $9.5m in Series A funding to develop its invoice payment tool that automates the process for how and when businesses get paid.
Virgo Investment Group led the investment with participation from Cresset Capital Partners.
The funding will be used to scale the company’s technical platform, boost technology development, and sales and marketing. Founded by Lara O’Connor Hodgson and Stacey Abrams – who also co-founded Insomnia Consulting and Nourish – Now’s platform enables B2B companies to get paid immediately while allowing their customers to pay later.
It continuously learns by aggregating data and risk management based on ten years of invoice payments across more than 1,000 businesses and $700m in invoice payments.
Its flagship offering, NowAccount, is an accelerated invoice payment solution. Any qualified B2B business in the US generating up to $50m in revenue gets paid within two business days, with a 2.5%-5% service fee, upon verification.
In simple words, after delivering goods and services to one’s customer, businesses submit the invoice through NowAccount where it is processed, confirmed and approved. Once approved, Now pays the business 100% of the invoice and the customer pays in its normal fashion, remitting the payment to a lockbox or account at Now.
The reason behind the company’s success was driven by the lack of technology when it comes to invoicing. Pre-Covid-19, it took B2B companies 48 days to collect account receivables on a net-30 invoice and when the COVID-19 pandemic hit it ballooned to over 70 days. During the Covid-19 pandemic, customers have roughly doubled the length of their payment terms with their suppliers as companies want to take longer to pay. This was the key painpoint addressed by Now which helped it get more clients.
Abrams said, “When we think of lenders, we think of financial institutions like banks and when we think of borrowers, we think of small businesses; however, small businesses in the US lend more than they ever borrow and are the largest source of lending due to delivering products and waiting 30 days or more (sometimes much more) for payment.”
With Now, Hodgson and Abrams aim to give businesses who use invoices the same opportunity the credit card system provided for retailers by paying them immediately and helping them grow fearlessly, Abrams added.
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