Prague-based fintech 4Trans, which speeds up invoicing processes for hauliers, has raised a €3m seed round from Atmos, Tera Ventures and Lighthouse Ventures. The company also raised €15m in debt as part of the round from Advance Global Capital.
What does 4Trans do?
4Trans’s core service is providing factoring. It’s a business model that’s been around for a long time; in short, Company A sells its unpaid invoices to Company B at a discount. Company A gets cash, and Company B can collect the invoices when paid. But the supply chain and logistics sector is poorly served by traditional banks and factoring companies.
“We serve the underserved, the unbanked. We unlock the financial inclusion for those that have been excluded by banks and the mainstream financial system,” says Jaroslav Ton, the company’s founder, the grandson of a lorry driver.
What makes 4Trans different from traditional factoring providers is its AI-driven instant risk modelling, by which the company is able to pay hauliers up front in just a couple of minutes.
Just this year, 4Trans’s customer base has grown to 500 and monthly revenue has increased 10-fold. The company operates in the Czech Republic and Slovakia, with a few customers in Poland.
What’s the market like?
The pandemic-fuelled ecommerce boom in Europe combined with global trade tensions have put a lot of pressure on the international supply chains. The result: congestion, delays and a lack of financing. Many startups have been coming up with solutions on how to make deliveries faster and smoother, and 4Trans’s success is also a part of this trend.
At the same time, the company is raising money at the time when many VCs are increasingly interested in the Czech startup market. Investors backed Czech companies with $787m since the beginning of this year versus $652m for all of 2021, according to Dealroom, putting the country on track for a record year of funding.
Who’s investing in 4Trans?
- Atmos Ventures — an American VC that backs deeptech companies
- Tera Ventures — an Estonian VC
- Lighthouse Ventures — a Czech VC
- Advance Global Capital — UK investment fund has extended a revolving credit facility to the startup
What’s next for 4Trans?
The company is planning to strengthen its domestic operations and expand to other European markets, primarily Poland. It will also develop the technology and grow its international team.
While factoring will remain its main service, Ton doesn’t shy away from the idea of providing more financial services to SMEs. “Going forward, the idea is to provide a holistic service so that hauliers can find any kind of financial instrument they might possibly need for their business,” he says, stressing that the company is already looking at insurance and business loans.
While 4Trans's core business might look a bit niche, the segment it serves makes up a big and important part of the European economy. And it doesn’t have to stop there: Ton wants to focus on hauliers now, but he acknowledges there are many other sectors currently overlooked by banks and insurers, like SMEs working in construction or FMCG, which he could explore in the future.