Wharton FinTech
Published in

Wharton FinTech

Eyal Shinar, Co-Founder of Fundbox — Disrupting B2B Financing

Miguel Armaza sits down with Eyal Shinar, Co-Founder and Executive Chairman of Fundbox, a company focused on disrupting the $21 trillion B2B commerce market by launching the world’s first B2B payments and credit network.

Since its inception in 2013, Fundbox has raised more than $300 million from leading investors like Khosla Ventures, General Catalyst, Spark Growth Capital, and Jeff Bezos.

We talked about

  • Company origins
  • Customer acquisition and distribution strategies
  • Entrepreneurial challenges
  • Reflections around the PPP loan program in the US and the company’s incredibly meaningful role at the height of COVID to disburse these loans to small businesses.
  • As well as his thoughts on the key and strategic roles of fintech and tech during the pandemic
  • Lessons for entrepreneurs
  • And a whole lot more!

Full interview → Spotify | Soundcloud | Apple

Back when Eyal was working for Battery Ventures, a VC focused mostly on FinTech and DeepTech, he stumbled across the opportunity that would eventually become Fundbox. Towards 2012–2013, Mr. Shinar observed there was a confluence of digitalization of data being moved to the cloud through apps for inventory management, accounting, and company financial data. Not only was this granular, high-quality data available digitally, but it was also accessible through APIs. In addition, recent machine learning innovations allowed them to pull the data in real-time and draw very accurate credit underwriting conclusions. So, in early 2013, Eyal and his co-founders took the leap of faith and launched Fundbox with a vision of building a B2B payments and credit network, and focused on integrating their product on established business software, like QuickBooks and Freshbooks, that was already being used by potential clients.

Fintech, a Force of Good in 2020

Over the last seven years, Fundbox has become a large player in the B2B lending space and has funded billions of dollars in loans for their clients. The company has experienced consistent yearly growth and achieved important milestones along the way, but the truth is 2020 was their real breakout year. The challenges of COVID allowed Fundbox to shine and its contributions to the economy should be celebrated.

“We had an interesting test of our thesis — that machines can do a better job than humans — during Corona. And I’m happy to say that we grew very fast during Corona, but we also turned profitable.”

As soon as the crisis began, Fundbox decided to focus on its strengths and continue operating their core business (serving new and existing customers). Once they got their portfolio under control and realized the hit on their loans was nowhere close to their doomsday scenarios, Mr. Shinar and team leveraged the speed and agility of the business to gain market share and become a direct originator of PPP loans and quickly managed to provide most of their customers (as well as new ones) with PPP funds.

In retrospect, Eyal is convinced PPP saved many businesses in the US and avoided a huge blow to the economy. More importantly, it was thanks to FinTech companies like Fundbox that hundreds of thousands of small businesses were able to access stimulus funds and survive the crisis. In his own words, “At the time, it was almost like an ER treatment, you don’t think about the long term consequences, you’re just making sure the patient, which is the economy, especially the small business economy, just stays alive. And they did manage to keep most of them alive. There may be long term consequences, but I’m not smart enough to know what they are. I think without more agile, fast-moving FinTech companies, it would have been very hard to translate the program into actual cash in bank accounts for the smaller businesses.“

Entrepreneurial Advice

What has Eyal learned in close to a decade of entrepreneurship? He shared three big lessons:

  • Importance of the first year and why the devil is in the details! — “The first year is pretty crucial in shaping the culture and the DNA of the company and it’s really hard to change it over time. The co-founders, choosing even something that would seem as mundane as the law firm that you’re going to use, that’s going to have a lot of effects over how you’re going to set up your business, how you’re going to plan, structure, transfer pricing, different office locations, the emphasis you’re putting on your tech stack, those things that seem detailed, they actually have a huge effect of how you’re going to look like two years down the road and seven years down the road. So I would put a lot of emphasis on it.
  • Culture Matters — “I have historically been cynical about things like culture, values, and principles. But once you actually go through this, in the trenches, taking fire, then you understand how important that is. And I would urge people, once they figure out what their startup is, it’s just as important to know the culture you want and what are the core principles and values to inject from the beginning.“
  • Distribution is key — “The importance of product is obviously crucial, but your distribution channel is just as crucial as a product. You can have the perfect product, but it’s not going to be adopted if there’s some kind of failure or non-consistent plan around how you’re going to distribute it. So we spent a lot of time there before going to market.”

Eyal Shinar

Eyal Shinar is the Executive Chairman & Co-Founder of Fundbox. Prior to his current role he served as a vice president at Battery Ventures where he led many projects and investments in the areas of finance, machine learning and software as a service. Additionally, Shinar was one of the first employees of Old Lane, a $5.5 billion New York-based global hedge fund (later acquired by Citigroup), and also worked for Castle Harlan, a leading $6 billion NYC-based buyout firm. Shinar earned his MBA from The Wharton School of Business at the University of Pennsylvania.

About Fundbox

Fundbox is a leading financial technology company focused on disrupting the $21 trillion B2B commerce market by launching the world’s first B2B payments and credit network. With heavy investments in machine learning and the ability to innovatively analyze transactional data, Fundbox is reimagining B2B payments and credit products in new category-defining ways.

Fundbox has received numerous accolades for innovation including the prestigious Forbes A.I. 50, Red Herring North American 100, Forbes Fintech 50, CB Insights Fintech 250, Benzinga 2019 Fintech Listmakers, Forbes Billion Dollar Startup To Watch among others. Since the company’s founding in 2013, Fundbox has raised more than $300 million from a blue-chip group of investors led by Khosla Ventures, General Catalyst, Spark Growth Capital, and Jeff Bezos.

Previous Episodes You May Enjoy:

Fintech for the Future of Work with Craig J. Lewis, CEO & Founder of Gig Wage

Creating Pathways to Better Financial Health — Anu Shultes, CEO of LendUp

Noah Kerner, CEO of Acorns — Leveling the Investment Playing Field

Empowering the Vulnerable with Financial Tools — Claire McDonnell, Co-Founder of True Link

Building Unicorns and Redefining Online Banking — Renaud Laplanche, Upgrade CEO/Co-Founder

Financial Literacy, Mocking Oprah, and Life Lessons with Neale S Godfrey

Dan Henry, CEO of Green Dot — Modern Banking for Everyone

For more FinTech insights, follow us below:

Wharton Fintech

Website | Medium | Twitter | LinkedIn | Facebook | Instagram

Miguel Armaza

Twitter | LinkedIn



Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Miguel Armaza

Miguel Armaza

🎙Co-President/Podcast Host @WhartonFintech. Fintech investor @ Gilgamesh. 📚MBA/MA Candidate @Wharton/@LauderInstitute. Author of Fintech Leaders Newsletter✍️