Automating supply chain financing with 40Seas

What

40Seas is an Israel-based platform for cross-border trade financing. It uses technology to deploy flexible payment options that optimize payments flows for suppliers, buyers, and other supply-chain stakeholders. Through embedded finance as well as offline portal payments solutions, 40Seas sees itself as solving e-commerce by taking B2B from an offline mode into a digitized one.

40Seas emerged from stealth mode to announce an $11M Seed round yesterday led by Team8, as well as a $100M credit facility led by ZIM Integrated Shipping Services Ltd., with the option to extend the facility to $200M.

Why 

Eyal Moldovan, 40Seas’s CEO and Co-Founder, said that the payment terms and frameworks governing the B2B space are the same ones he saw his father navigating as a clothes importer thirty years ago. “Letters of credit, which are the solution offered by banks, are super costly and complicated; and if you fast forward to today, this industry has not changed,” Moldovan said. “It’s super complicated today to work with foreign exporters and get payment terms.” That shortcoming amounts to a $1.7 trillion financing gap affecting SMEs, he said.

How

With its sights set on scaling quickly and helping address this gap through innovative and efficient technologies, 40Seas has built out its tech stack to solve for compliance and mitigate the potential for the myriad regulatory headaches that come with cross-border commerce. It works with regulated partners in the countries it operates in, especially those related to payments and banking. “The frameworks [already] exist; we’re just helping digitize and modernize them,” Moldovan said. “We’re building and bringing the best tech and new tech to modernize a very old legacy system.”

The partnerships are largely possible because of 40Seas’ API-first solution, which lets the company embed its partnerships into user flows. Through these products, 40Seas envisions smoothing out major hurdles within the supply chain by acting as a financing intermediary between buyers and suppliers. Suppliers can receive payment from 40Seas once their goods are shipped, and then the buyer pays 40Seas according to the terms of their contract. This mitigates cash flow issues and can help both buyers and sellers scale and innovate. “We can really build and provide value,” Moldovan said.

Given the size of the financing gap facing SMEs and the B2B space, Moldovan said 40Seas’s main task is to continue scaling in the coming year. “We have so much scale within the existing pipeline, and we already received more interest just from going out of stealth,” he said. “So we really need to continue to execute.”