Flowpay, a Czech fintech using predictive AI models, automation and Embedded Finance to help small and medium-sized enterprises (SMEs) access better operational funding, has raised €2,1 million in its seed round. It was backed by Techstars, alongside rising Czech VCs like Soulmates Ventures and DEPO Ventures, and key angel investors such as Mark Ransford, Martin Herrmann, Kartik Varma, Allard Luchsinger, and others.
This newly acquired investment will allow Flowpay to scale beyond the Czech Republic, enhance its technological capabilities and offer its services to a wider range of SMEs.
Since its founding in 2021, Flowpay has achieved significant success, including participating in the prestigious Techstars accelerator in Amsterdam. Flowpay has become an important player in the operational finance market thanks to its innovative platform and use of AI, which enables companies to quickly and easily obtain financing based on the analysis of real operational data. Alongside six other European startups, it was accepted to the IBM fintechx program, which focuses on accelerating the adoption of generative AI in financial services. In addition, Flowpay won Technological Startup of the Year in the Vodafone Idea of the Year competition.
“Even if you have a profitable and fast-growing business, banks might still not give you a loan when you need it for something like stocking up your warehouse or investing in advertising. Banks cannot assess risk precisely and usually just look at tax returns, which are outdated and most often do not reflect reality. At Flowpay, we work with client data taken directly from their point-of-sales systems, e-commerce platforms like Shoptet, and use AI to rate their potential to obtain financing. We want to help SMEs grow with our Risk as a Service (RaaS) solution and license it to financial institutions around the world,” explained William Jalloul, founder and CEO of Flowpay.
Flowpay’s plans include both expansion to new markets and further technological development to better suit the needs of its clients. This investment will also allow it to increase its capacity to provide personalized credit solutions tailored to the specific needs and capabilities of each business.
The Flowpay team currently consists of approximately 15 experts, primarily from the fields of Data Science and IT, whose respective skillsets facilitate smooth and efficient operations within the company. With ambitions to continue growing and further accelerate development, Flowpay plans to expand its ranks to a total of 20 team members in the near future.
“SMEs are the backbone of our economy. To be successful, they need financing to fund their growth. Most banks are not well set up to support them effectively, as processing relatively small loans is costly, and assessing risk based on outdated data poses a significant challenge for them. Because of these dynamics, many traditional lenders choose to focus on higher-value loans for larger companies, leaving the SME segment poorly served and economies performing sub-optimally. Flowpay is a prime example of a new generation of tech-driven companies that enable fast and cost-effective funding of smaller loans for the SME segment,” said Allard Luchsinger, Managing Director Techstars.
“Borrowing money and going into debt can be unsustainable. To address this challenge, Flowpay has introduced a key innovation for SMEs, which make up an undeniably crucial segment of the economy. Flowpay shortens the time needed to evaluate credit applications to mere minutes, increases the accuracy of risk assessment, and speeds up access to finances for SMEs. This approach represents a revolution in financing, supports dynamic growth, and contributes to the sustainable prosperity of our economy,” added Hynek Sochor, founder of the accelerator and fund Soulmates Ventures.
“For businesses, the loan application process is often prolonged and uncertain, which is a result of the bank sector’s slow progress in digitalization. “Flowpay solves this problem by digitising and automating processes using accurate data. This data is available to the business by connecting to the company’s financial, accounting and business systems, forming a technology bridge between the business, the financier and possibly another party providing the data, such as a payment gateway or e-commerce platform. Flowpay is one of the pioneers of this embedded finance approach in the CEE region with a vision to become a global leader in providing financial solutions for sole traders and SMEs,” added Michal Ciffra, partner at DEPO Ventures.
