Israeli startup credit investor Liquidity Capital, a subsidiary of Meitav Dash, has raised $20 million from US venture capital fund Spark Capital and MUFG Innovation Partners Co., Ltd. (MUIP), part of the Mitsubishi UFJ Financial Group at a company valuation of $100 million. The investors have been allocated 20% holdings in Liquidity’s share capital (fully diluted).
Liquidity has developed an algorithm based technology for revenue and cash flow trajectory that enables large-scale financing transactions through constantly and continuously monitoring, utilizing a unique business model based on purchase of future revenues, allowing strong companies to grow fast. Liquidity Capital’s fund invests in companies with annual revenue of more than $3 million, which show consistently growth of tens of percent and ongoing revenues. Liquidity Capital extends credit to startups, rather than taking an equity stake.
The Investment funds will accelerate the continued development of the technology developed by Liquidity and to establish and expand Liquidity's business, including the investments funds managed by it, focusing on Asia and the US. As part of the transaction, Liquidity has granted Spark a license to use the technology developed by it and Spark has granted Liquidity the right to participate in future portfolio investments.
This is the second transaction for Liquidity where a leading financial institution invites collaboration, support and practical knowledge in managing investments through Liquidity's technological capabilities. Two months ago, Liquidity entered into a further transaction MUFG Bank). Jointly establishing (50/50) a debt fund management company, MARS Growth Capital based in Singapore utilizing Liquidity's advanced technologies. MUFG Bank has committed to invest $80 million initially. As part of the transaction, Spark may increase its holdings in Liquidity up to 20%.
Meitav Dash will not be selling any of its holdings, but in light of the shares allocation for the new investors, Meitav Dash will no longer control Liquidity and will hold 44.6% of Liquidity’s share capital (38.6% on a fully diluted basis). Meitav Dash forecasts that the total accounting profit to be reported will be $20 - $25 million.
Liquidity CEO Ron Daniel said, "This is a further recognition of the exemplary funding method made through the unique trajectory and underwriting technology we have developed. This equity investment will enable us expanding our operations to further markets, particularly in Asia and the United States. With the support of our new partners, Spark and MUIP and with Meitav Dash, that has invested in Liquidity since its foundation, we will be able to continue and lead the financial industry transformation. In addition, Liquidity intends to grant financial players the opportunity to explore the using of the technology it has developed to manage their investments as a SaaS model, when the license agreement that will enable Spark to manage its investment portfolio via the Liquidity Dynamics platform is the harbinger."
Meitav Dash CEO Ilan Raviv said, "This investment is a significant vote of confidence in Liquidity’s uniquely developed technology. The alliance with global financial institutions will enable Liquidity to extend its global deployment, as well as continue to accelerate the development of the self-proven technology. Liquidity's unique underwriting and cash flow trajectory model has a significant advantage over other funding solutions, and I am pleased that specifically these two global giants are joining us to expand the operations."