Maersk Growth Invests in German Trade Finance Startup
Maersk Growth, a corporate venture arm of Danish shipping giant Maersk, has decided to invest in European fintech company Modifi.
The new partnership will be kicked off today with a meeting in Copenhagen, as informed by Maersk.
Founded in November 2018, Modifi offers a trade finance platform for small and medium-sized buyers and sellers. It has developed a digital and automated underwriting model enabling lower operating costs and quicker access for customers to increased liquidity.
Maersk Growth and investor Global Founders Capital led a funding round of EUR 5.5 million (USD 6.2 million) for the expansion. Picus Capital completed the round alongside existing shareholders.
“We are delighted to have partners who are committed to solving trade finance for thousands of underserved small and medium-sized businesses. Winning Maersk as investors is the ultimate seal of approval for our mission of digitizing trade finance,” Nelson Holzner, CEO and Co-founder, said.
“We are convinced that this partnership will provide plenty of opportunities for cooperation beyond the equity investment,” he added.
“We are looking forward to partnering with Modifi and exploring synergies of collaboration to the benefit of current and future Maersk Trade Finance customers,” Vipul Sardana, Maersk’s Global Head of Trade Finance, commented.
Small and medium enterprises (SMEs) contribute around 30% of global trade. Access to formal financial services is a worldwide problem and nearly 45% of SMEs list this as a major obstacle to trade. Half of the financing requests by SMEs are rejected by banks, resulting in a USD 1.5 trillion funding gap annually. Moreover, 60% of rejected trades collapse due to the lack of financing.
“The old ways of performing trade finance is still reliant on slow, paper-based and complex processes. Technology and digitalization will be a driving force in setting future standards by changing the legacy systems of doing risk assessment, and we believe Modifi has the right team and product to do so,” Jeppe Hoier, Investment Partner at Maersk Growth, explained.
Since its launching, the company has opened offices in Amsterdam and now in India to further drive international expansion.