Lithuanian fintech startup SME Finance receives $95 million from the EIB
Vilnius-based SME Finance, a fintech startup that establishing a neobank in Lithuania, has received $95 million in funding from the European Investment Bank. The EIB is aimed to support small and medium-sized Lithuanian, Latvian, and Estonian enterprises. It is the largest investment awarded by EIB to a fintech lender, Fintech Baltic writes.
Founded in 2016 by Audrius Milukas, SME Finance is the largest non-banking alternative financing company in the Baltics. SME finance helps businesses to grow by providing non-standard factoring solutions to small medium-sized enterprises. The company is aimed to address an identified funding gap in the financing of working capital for SMEs and midcaps.
According to Mindaugas Mikalajūnas, CEO of SME Finance, the bank is a natural stage of growth for the non-bank financing enterprise that is the biggest in the Baltic states at present.
He explains: “We were already thinking about a neobank when we were founding SME Finance but first of all we wanted to create a strong base of clients and capital and to wait for the time when a bigger demand for banking services of this type is developed in the market. We believe that now is the right time, as the area of financial services is becoming digitized – it is a global tendency. However, the niche of neobanks remains blank – there is no strong regional or even global market player who would be oriented to business clients of such type; the closest example to a neobank for business is Coop Pank operating in Estonia, Atom bank in the UK, or Revolut that is providing global services”.
The raised funds will help meet the needs of enterprises in financing working capital through a fully automated factoring platform for self-service. The first wave of EIB financing is expected to reach business by the first half of 2021.
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