Startup Spotlight Series: Fundera

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Image courtesy of AngelList

What: Fundera is an online marketplace connecting small business owners with non-traditional sources of funding.

Where: New York, New York

When: Raised Series A Funding in Feb 5, 2014.

Why: To provide a fair and transparent marketplace putting the needs of the small business first.

How it Works

Bob’s Bodacious Burger Bonanza, just opened up on main street and is looking to be the next big name in the burger business. Bob himself has a recipe ripe for customer consumption, but one obstacle stands in his way. Bob does not currently have the capital to purchase the kitchen equipment necessary for optimal burger production. Not wanting to give up any equity on what Bob is sure to be the next Shake Shack, Bob decides to take on some debt to purchase his equipment. After heading to a few local banks in town, Bob realizes that the banks are not equipped to provide him with the the type of financing he is looking for, as quickly as he is looking for it, and is fearing that he will be denied from each institution. Bob also knows that since the recession of 2008 banks have typically reduced the number of small business loans they have been providing. Enter Fundera.

By going online to, and answering a few questions about his business, Bob is able to instantly see a variety of non-traditional lenders as well as average loan amounts that each leander has funded to companies similar to Bob’s. Bob is free to than pick the best option for his business and get to work on finishing up on the finer details of the agreement. Fundera is free for Bob to use and generates revenue strictly from the origination fees from the lenders.

A few sticking points

Although Fundera, seems to be a great service on the surface there are a few sticking points we have with the product. (Disclaimer: we have not used Fundera for fundraising nor have we personally used the matching software.)

Fundera claims to provide a transparent marketplace in favor of the small business owner and also claims to hold no biases as to which lenders it is matching each borrower with. This could be a potential conflict of interest with Fundera purposely matching you to the lender that pays the highest origination fee, however, the software provides the borrower with quotes from a variety of different lenders ensuring just enough transparency to eliminate some of the more obvious forms of bias.

Another point of note is that the companies that Fundera uses as lenders are typically known as non-traditional. Although each lender is a bit different, think big data from QuikBook, Amazon, eBay, and PayPal as a substitute for credit scores, and quicker, smaller loans with shorter payback periods. Each of these facts come with pluses and minuses for small business owners and each must be dealt with in turn.

Fundera’s non-traditional lenders. Image courtesy of

The final sticking point is that Fundera has a clear incentive for small business owners to pursue non-traditional financing. This could potentially mean steering companies away from equity financing or more traditional bank loans and toward their non-traditional borrowers. There may be a fair amount of subjectivity when it comes to these loans, and the decision will ultimately come down to the discretion of the borrower. They offer customer support to small businesses in need of guidance which, at the moment we believe is every bit as unbiased as their software, but is nonetheless something of which to be weary.


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Out of the 100,000 profiles that are ranked in any given category in Crunchbases’s database, Fundera is ranked 2,569th in the category of companies. For those not familiar with Crunchbase, or the database rank take a look at the description below from the Crunchbase Blog.

Crunchbase Rank is determined by an algorithm that takes into account the number of connections of a profile within the platform, the amount of community engagement, funding events, news articles, acquisitions, and more. These factors decay over time at varying rates depending on the factor (i.e., news decays more quickly than size of funding rounds).The benefit of Crunchbase Rank is it lets users prioritize their search results by influence. The higher the Rank, the more influential the profile is compared to its peers. The lower the Rank, the less important the profile is to the community.


With a seasoned and capable Silicon Valley stud at the helm, in Jared Hecht, a competent CTO and former Gilt Groupe Engineer in Rohan Deshpande, Fundera is a nice addition to the New York City Tech scene.

Fundera boasts a wide array of respectable VC firms including backing from the likes of Vinod Khosla’s VC firm, Khosla Ventures as well Aaron Levie of Box fame.

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With no real tech competitors in this unique market niche, Fundera is proving to be a real competitor for the commercial bank incumbents who with each passing day seem to be shooting themselves in the foot. Companies like Fundera could be providing a much needed wave of change replacing tired Wall Street establishment with young Silicon Valley disruption. My hope is that Fundera will keep on their mission and not let a few years of success or board member scrutiny sway them from having the backs of small business owners everywhere. Only time will tell, but I am optimistic.