International Finance Corporation participated in Demica’s $25 million second round financing, earmarked for international expansion efforts and continued investment in technology and operations. Additional investors in this round included Wyelands Capital, a member of the GFG Alliance, alongside strong involvement from the existing investors: JRJ Group, TOMS Capital, and 76 West Holdings.
Demica is one of the world’s largest working-capital financial technology firms. Its proprietary technology platform automates complex, high volume programs and it has currently $9+ billion of funding from banks and institutional investors outstanding on the platform.
In addition to the investment, IFC and Demica announced a partnership that, by 2022, is expected to facilitate $9.8 billion in annual financing for suppliers and distributors in emerging markets — at least 40% of which will be small and medium enterprises.
Small and medium enterprises in emerging markets face a finance gap of $4.5 trillion and the scarcity of working capital and trade finance accounts for much of that gap. Demica’s platform helps suppliers around the world to sell their receivables and optimize their cash flow simply and at low cost by connecting them to large corporations and investors.
“Supply chains are becoming more global, introducing currency and jurisdiction complexity for investors in working-capital finance,” said Andi Dervishi, who leads IFC’s fintech investments. “At the same time, those supply chains want more capital choices and faster capital delivery. Hub-and-spoke, multi-jurisdiction and multi-currency models like Demica’s provide the business model and the infrastructure to meet these needs. Such approaches are key to IFC’s drive to create new markets by changing market architecture and market participation.”