Qwil, a startup known to offer financing to small businesses and freelancers, has raised approximately $200 million in debt funding and $24.4 million in equity from investors such as Jefferies Financial Group Inc.
Brian McGrath, head of principal finance and fintech investing at Jefferies, says, “We’ve partnered with Qwil in their mission to provide fair alternative financing to those typically underserved by the financial industry – contractors and small businesses.”
The funding round was led by a venture firm PeakSpan and participated by major companies like Reciprocal Ventures, Silicon Valley Bank, Mosaik Partners, Cantos, Prosper President Emeritus Ron Suber, and Sam Hodges.
After raising $224.4 million, Johnny Reinsch, CEO, and co-founder of Qwil informed that the company would extend its current San Francisco headquarters in the third quarter of the coming year, and work on enhancing the breadth of the people and businesses it lends to.
Johnny Reinsch co-founded Qwil in 2015. It is one of the growing young companies taking advantage of emerging technology to deliver user-friendly and cheaper financial services to customers and businesses apart from banks and other traditional providers.
Reinsch landed with the idea of Qwil in 2014 after he had closely defaulted on his mortgage when a client had not paid him on time for freelancing. Being denied financing from his bank, he was left with a few options other than high-interest and voracious loans.
This San Francisco-based company works with on-demand markets and freelancers to get paid on time or sometimes sooner than the due of invoices. Unlike a few fintech lenders, it does not look at the outmoded credit scores while determining the loan eligibility, and as an alternative uses information like payment data, which aids in keeping the cost at an acceptable level.
The company’s flat fee for the advance pay equates to a 20% rate on an annual basis, Reinsch said. It can send payments to 140 countries covering major currencies and helps marketplaces entice better freelancers by providing the earlier access to pay.
Qwil has gained more than $150 million in payments through its platform until now, with nearly half of the consumers using its services regularly after their first transaction.