UK fintech Lenkie raises GBP £49m to boost SME financing

UK fintech company Lenkie has raised GBP £49 million in its Series A funding round to expand services in SME payables financing.

The SME financial ecosystem faces a structural change as traditional banks curtail lending, resulting in a significant GBP £22 billion funding void for UK SMEs. Lenkie, a cashflow management platform, aims to address this gap by facilitating direct payments to suppliers, helping businesses cover essential costs from the outset.

Lenkie's latest funding round involves GBP £4 million from equity and a GBP £45 million debt facility, supported by a major US private credit fund. This development underscores the increasing demand for alternative financial solutions, particularly for small and medium-sized enterprises struggling under traditional lending models.

SMEs often encounter financial obstacles, such as the need to pay for inventory, subcontractors, and equipment prior to actual sales. Lenkie's approach to payables financing allows these businesses to acquire the necessary resources upfront, securing and facilitating their growth initiatives.

Founded in 2021 by Sanjeev Jeyakumar and Nnaemeka Obodoekwe, Lenkie has already allocated over GBP £70 million to underserved SMEs, reaching over 2,000 suppliers in 40 countries. The company utilises proprietary underwriting technology along with real-time performance data to tailor financing solutions that provide swift approvals and minimise unnecessary delays.

Sanjeev Jeyakumar, CEO and co-founder, commented, "At its core, all lending is built on a foundation of trust. We're able to use data and technology to understand the nuances of each business to build that trust in seconds. This enables us to provide fast and flexible capital when it's most impactful. By financing specific transactions we're creating a new model of financial inclusion that aligns with how modern businesses operate and grow."

Before founding Lenkie, Jeyakumar worked as a credit trader at Citigroup, structuring over GBP £2 billion in lending across emerging markets. His experience highlighted the effectiveness of using real-time data to mitigate borrowing risks. During his tenure at a B2B marketplace, he recognised that the main obstacle for entrepreneurs was not the absence of growth opportunities, but the cumbersome borrowing process.

"The challenge wasn't a lack of growth opportunities, it was a broken borrowing experience. By removing friction and making access to capital effortless, we could unlock immense potential and help entrepreneurs realise their ambitions," added Jeyakumar.

In today's market, SMEs constitute 60% of employment and account for 50% of the UK's GDP, yet they continue to face considerable funding challenges. Lenkie's transaction-based funding model provides a targeted financial solution, distinct from the standard loan products, improving cost-efficiency and efficacy by aligning with SMEs' operational cycles.

Ankit Monga from Mongas Kids Wear Limited expressed support for Lenkie's approach, stating, "At the heart of our business is the need to invest in stock, reach new customers, and improve supplier relationships. Lenkie's credit facility has been critical in enabling us to achieve all three. Lenkie offers an outstanding service and the continuous product innovations ensure an excellent user experience. It's the perfect solution to help us scale."

With new funding secured, Lenkie is set to further enhance its data-centric underwriting methodologies, forge strategic partnerships, and explore new markets. The company continues its dedication to dismantling financial barriers, supporting SME growth, and fostering the next wave of UK entrepreneurs.