Two new bond offerings accompany the funding, enabling small businesses to raise capital from their communities and, in turn, provide a meaningful return back to those investors.
SAN FRANCISCO--(BUSINESS WIRE)--SMBX, a marketplace connecting successful small businesses with everyday investors through small business bonds available via its app and website, announced today that it has raised $2.5 million in Seed funding led by Better Ventures with participation from Impact America Fund (IAF), Unpopular Ventures and others. With SMBX, small businesses can issue bonds directly to their customers and community. Those who invest in the small businesses listed on the SMBX can earn a 4-9% return, and the businesses, in turn, can obtain the capital they need to grow.
“The SMBX is ushering in the next wave of financial technology,” Bhavish Balhotra, CTO of SMBX. Jackie Chan, COO, added, “We're lowering the barriers to complex financial tools. Let’s use these innovations to empower communities to thrive. We are especially excited to open new pathways to capital for small business owners affected by COVID-19 and give everyday people the ability to invest in the small businesses in their community.”
The funding will support SMBX’s growth as more and more businesses seek out new ways to raise capital and engage with their customers. Along with announcing the funding, SMBX has added two new bond offerings to the platform that anyone can invest in starting today:
- The Cookie Department, a Portland, Ore.-based online business selling KETO cookies, is raising $25k to grow its online sales and launch its new flavor, Champion Chip.
- Uji Time, a Bay Area-based Japanese inspired dessert shop, is raising $100k to introduce a new line of hard ice cream that’s easier to deliver to their community across the Bay Area.
“Sound, scalable, and community-oriented financial products like SMBX are extremely important — especially for businesses run by people of color. Despite their considerable and growing contribution to the American economy, these businesses haven’t been prioritized by large financial institutions and their success is critical for national economic recovery,” said Kesha Cash and Kaiton Williams, investors at IAF.
“Businesses issuing bonds on SMBX can now turn to their customers for a source of financing, which ignites a virtuous reinforcement cycle that benefits both the business and the community. We’re proud to back a company that’s mission focuses on building a more equitable economy,” said Wes Selke, managing director at Better Ventures.
Through the SMBX mobile app or website, individuals can invest for as little as $10 and earn up to 9% return, via monthly payments of principal and interest. For businesses, SMBX offers competitive interest rates between 4-9%, doesn’t require a personal guarantee, and streamlines the process by completing all necessary paperwork. SMBX does not collect any fees until the company successfully closes its bond offering, at which point it applies a 3.5% service fee on the total fundraised amount.
SMBX is the first small business capital marketplace for issuing and buying small business bonds. Founded in 2016 in San Francisco, Calif., SMBX is ushering in a new model of finance by cutting out the middle-person and enabling small businesses to offer bonds directly to the public without banks and standard regulatory fees.
About Better Ventures
Better Ventures backs mission-driven founders leveraging breakthrough innovations in science and technology to build a more sustainable and equitable economy in which both people and planet thrive. The firm invests in software, data science, and life sciences startups that are innovating across industries in ways that will deliver big profits and measurable progress towards achieving the Sustainable Development Goals. Better Ventures’ core investment thesis is that mission-driven companies outperform the market thanks to the magnetic force of purpose, which fuels intrinsic founder motivation and drives key competitive advantages in hiring, attracting resources, and building an enduring brand.
About Impact America Fund
Impact America Fund is the largest Black woman-led impact venture capital firm in the U.S. that invests with a racial equity lens. The firm is focused on increasing the participation and power that low and moderate income communities of color have within the American economy. Impact America Fund invests in tech-driven businesses that create new opportunities for communities that have been chronically underserved and undervalued. For more information, visit www.impactamericafund.com.