The Rise of B2B Digital Payments and Tribal Credit's Expansion

Demand within the B2B payments sector has surged, accompanied by significant investor interest, following the onset of the COVID-19 pandemic. Businesses are increasingly focused on establishing digital methods for reciprocal payments. The complexities are amplified when these transactions involve international borders.

Tribal Credit Secures $34.3 Million in Funding

Startups established prior to the pandemic are well-positioned to capitalize on this evolving landscape. Tribal Credit, for example, initiated its beta program in late 2019, aiming to deliver payment solutions tailored for startups and small to medium-sized businesses (SMBs) operating within emerging markets.

Tribal Credit recently announced the successful completion of a combined Series A and debt funding round, totaling $34.3 million. This investment was spearheaded by QED Investors and Partners for Growth (PFG). Existing investors, including BECO Capital, Global Ventures, OTG Ventures, and Endure Capital, also participated, alongside new investor Endeavor Catalyst.

Strategic Investment from the Stellar Development Foundation

The funding round included a $3 million investment from the Stellar Development Foundation, a non-profit dedicated to fostering the growth of the Stellar blockchain network. This demonstrates a commitment to innovative payment infrastructure.

How Tribal Credit Operates

Tribal Credit employs a unique, AI-powered underwriting process to assess businesses and authorize credit lines. Businesses can then utilize these credit lines through Tribal Card and Tribal Pay.

• Tribal Card is a business Visa card enabling the creation of both physical and virtual, multi-currency cards.
• Tribal Pay facilitates payments to vendors and suppliers who may not accept traditional credit cards.

The company’s core strength lies in providing SMEs with both virtual and physical corporate cards, alongside a digital platform designed to empower founders and CFOs to manage spending across distributed teams.

The Impact of the Pandemic on B2B Payments

“The COVID-19 pandemic has accelerated the shift towards online B2B payments, with numerous SMEs transitioning to digital platforms and increasing their spending on online goods and services,” stated CEO and co-founder Amr Shady in an interview with TechCrunch. “Modern businesses are inherently digital and globally oriented, and the need for corporate cards has intensified.”

Tribal Credit distinguishes itself by underwriting businesses directly, without impacting the personal credit of the founders. This is a key benefit for entrepreneurs.

The pandemic also necessitated remote work arrangements, creating a demand for tools that allow founders and CFOs to grant payment access while maintaining financial control. Tribal’s platform is designed to address this need by streamlining financial operations for geographically dispersed teams.

Competitive Landscape and Tribal’s Differentiation

While several companies offer credit cards for startups, such as Brex, which has secured $465 million in venture funding, Tribal Credit focuses on a specific niche. According to Shady, “SMEs in emerging markets face unique challenges, particularly concerning cross-border payments.”

Focus on Latin America, Particularly Mexico

Tribal Credit’s initial focus is on Latin America, with Mexico currently representing its largest market. The newly acquired capital will be used to accelerate growth within the region.

Specifically, the equity portion of the funding will be allocated to expanding Tribal’s leadership team in Mexico, while the debt component will support the increasing credit lines of its customer base.

“Over the past year, we have made substantial investments in our product development,” Shady explained. “We are the first mover in the LatAm segment, offering a comprehensive suite of SME products, including corporate cards, wire payments, and treasury services. We are optimistic about our future prospects in Mexico and beyond.”

Current customers include Minu, Ben and Frank, Fairplay, and SLM.

Tribal Credit is currently evaluating expansion into four additional Latin American markets and anticipates launching operations in one new market before the end of the year.

Investor Perspectives

QED Investors partner Lauren Morton stated that her firm has been closely monitoring the payments landscape and the lending requirements of SMEs in emerging markets.

“Among all the solutions we’ve examined in this market, Tribal offers a distinct and superior product that effectively addresses customer needs in a way that no competitor can replicate,” she noted in a press release.

Morton also highlighted Tribal’s strong traction in Mexico, with adoption by rapidly growing startups, including several companies within QED’s own investment portfolio.

Debt Facility Provided by PFG

PFG is providing the debt facility for Tribal Credit. In addition to funding from its global fund, PFG will also co-invest from its Latin America Growth Lending Fund, in collaboration with IDB Invest and SVB Financial Group, the parent company of Silicon Valley Bank.

Total Funding and Future Integration

Tribal Credit had previously raised $7.8 million in seed funding rounds. This latest investment brings the company’s total funding to $42.1 million. Furthermore, Tribal Credit has joined Visa’s Fintech Fast Track Program, which is expected to expedite its integration with Visa’s global payment network.

The company’s workforce has grown to 75 employees, an increase from 31 employees last year.