Rounds for Bill.com and LendUp a Thumbs Up for Commercial Fintech, Microfinance

coinsThe venture capital money is flowing into fintech and Bill.com and LendUp are the most recent beneficiaries. The investments show confidence in the commercial space and in microlending, respectively.

Bill.com, an accounts payable company serving the needs of small and midsize business, received $38 million in a round led by Scale Venture Partners today. Several large financial institutions were also involved, including Bank of America, American Express and Fifth Third.

The funding brings Bill.com’s total to some $80 million and serves as powerful validation of interest in commercial fintech. Businesses in the US are thought to be the stronghold of paper checks, but Bill.com is looking to bring more payments to the digital arena. The service allows electronic sending and payment of invoices, along with a complete audit trail.

The strong bank interest here is noteworthy. Banks process 80% of electronic payments and businesses just 20%, according to TechCrunch, but that balance is shifting and banks are looking to offer services like this to commercial customers.

Meanwhile, LendUp is a microlender with a social mission: helping users of payday loans avoid predatory rates and build a credit history. The startup received $14 million in Series A funding led by Google Ventures, which also funds OnDeck Capital and Lending Club.

Using publicly available data, including social media, to determine credit worthiness, LendUp makes loans of up to $250 to users with no credit history. Users can choose to pay back the loan in terms lasting from one week to one month, with an interest rate based on the lifetime of the loan rather than a score given to the borrower.

The FDIC counts nearly 30 million Americans without access to traditional credit. Meanwhile, payday lenders collect some $7 billion in fees per year, according to The Wall Street Journal. The lending space is being massively disrupted by the ready availability of data and the wealth of information it reveals about potential borrowers.

To sum it up, it looks like these two investments put paper checks and the Fico score in the crosshairs of disruption.

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