Israeli credit manager Viola Credit today announced the closure of a $700 million fund to provide lines of credit to fintech companies with platforms across the United States, Western Europe, the United Kingdom, Australia and New Zealand that disrupt traditional lending sectors. All the money was collected from Israeli institutional investors.
Viola Credit, formerly known as Plenus, was founded in 2000 and is part of the Viola Group. Viola’s traditional activity is to expand loans to finance operations of startups that do not want to embark on equity financing rounds and are looking for alternative ways to raise money. Viola has operated in venture and growth lending through a $200 million fund it raised in 2017.
Viola Credit has also adopted a strategy to provide lines of credit to growing fintech companies over three to four years. In this case, the credit is not for the operations of the startup, but to provide the available capital to its end customers who need credit of various kinds. For example, fintech companies built on a ‘buy now and pay later’ model, which has become popular in the wake of the Covid pandemic to allow customers to purchase items online or in stores. Viola raised a $160 million fund specializing in this area in 2019.
Viola Credit is led by partners Alex Ginzburg, Ruthi Furman and Ido Vigdor. Investors in the fund, Vigdor said, include banks, insurance companies and investment houses. Credit funds pose a lower risk than equity funds and a fixed income through interest.
Vigdor said: “Our advantage is that we also enter into agreements involving credit of $20-30 million – an amount that giant institutions like Goldman Sachs don’t get involved in. In the first phase, we check the fintech company’s ability to guarantee credit, and then we price the risk and build a line of credit agreement.”
He added: “Financial services are undergoing transformation shifts. Driven by accelerating digital adoption and the emergence of new business models, this fintech revolution enables new forms of banking experience and consumer financial services, which require securing lending capital solutions to support growth. We are proud to partner with innovative fintech platforms to nurture them as a company, help them build their products, and be an essential part of their go-to-market strategy.”
Published by Globes, Israel business news – en.globes.co.il – on May 26, 2022.
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