IFC, a member of the World Bank Group, and Demica, a capital financial technology firm, have announced a new partnership that will help unlock as much as $9.8 billion in annual financing for suppliers and distributors in emerging markets—particularly small and medium enterprises.
In addition, IFC participated in Demica’s $25 million second round financing that will enable the company to further expand internationally, move into inventory finance and continue to invest in its technology and operations. Additional investors in this round included Wyelands Capital, a member of the GFG Alliance, alongside strong involvement from the existing investors: JRJ Group, TOMS Capital, and 76 West Holdings.
Small and medium enterprises in emerging markets face a finance gap of $4.5 trillion—and the scarcity of working capital and trade finance accounts for much of that gap. Demica’s proprietary technology platform enables suppliers around the world to sell their receivables and optimize their cashflow simply and at low cost—by connecting them to large corporations and investors. Demica facilitates more than $90 billion a year in working-capital financing, connecting more than 150 corporations with suppliers and customers across more than 130 countries.
IFC’s investment is an amazing endorsement from one of the world’s largest multilateral institutions,” said Matt Wreford, Demica’s CEO. “We have been working closely with them for the past twelve months and are excited about the deepening relationship. This strategic partnership will materially enhance our clients’ ability to ensure all of their suppliers can access low cost liquidity irrespective of jurisdiction.
By 2022, IFC’s investment in Demica is expected to facilitate $9.8 billion in annual financing for suppliers and distributors in emerging markets—at least 40 percent of which will be small and medium enterprises.
Supply chains are becoming more global, introducing currency and jurisdiction complexity for investors in working-capital finance,” added Andi Dervishi, who leads IFC’s fintech investments. “At the same time, those supply chains want more capital choices and faster capital delivery. Hub-and-spoke, multi-jurisdiction and multi-currency models like Demica’s.