Juni jumps on $206M to help e-commerce players manage their own money better

The e-commerce market is on track to pass $5.5 trillion in revenues this year, which speaks not only to how much consumers are shopping online these days, but also to how many businesses there are out there now selling to them. Today, a startup from Gothenburg, Sweden, called Juni is announcing $206 million in funding — a $100 million Series B and a further $106 million in debt — to build out an e-commerce-focused neobank, designed specifically to cater to that growing group of retailers with tools to help them run their business.

Mubadala Capital led the $100 million equity round, with previous backers EQT Ventures, Felix Capital, Cherry Ventures and Partners of DST Global also participating. Meanwhile, the $106 million in debt funding — which Juni will use to fuel its credit products — is coming from TriplePoint Capital.

Founded in 2020 and launched in 2021, Juni closed off its Series A only in October of last year (it raised $21.5 million in July and a further $52 million in October), but it's been on a very strong pace of growth — "multiple hundred percent," CEO Samir El-Sabini said in an interview. (It didn't give actual customer numbers.) It's not disclosing its valuation, but sources close to the company tell me it is now in the region of $800 million.

Most incumbent banks, and now a fair number of neobanks, target small and medium businesses as customers. But the gap in the market that Juni identified and built to fill is that the needs of e-commerce SMBs, and those doing business online in general, are unique among them.

E-commerce businesses have potentially huge incoming and outgoing sums in their accounts, and that money does not necessarily come in a consistent stream. They likely do business in multiple geographies and multiple suppliers. And in addition to potentially selling across a number of platforms and marketplaces (all of which also add complexity to the finances and managing them), they use several other digital tools to sell, run and help grow their operations.

El-Sabini, who co-founded the company with CTO Anders Orsedal and Jonathan Sanders (who is no longer with the company but remains a "silent partner," El-Sabini said), all had track records of working in digital businesses where they saw, not just for themselves but also for their customers, an opportunity to build a bank that took all of that into account (so to speak) and built a financial management service that fit those dynamics.

So around basic banking, Juni's credit cards and capital advance/cash-back services (which is where the debt funding will be put to use), accounting and analytics are all optimized for the kind of incomings and outgoings that e-commerce companies have. The platform includes some 2,400 integrations with tools (and the data that those tools generate) that companies might potentially use for their accounting, their digital advertising, their payments on websites and more.

And while that sounds like a very large product with a lot of tentacles, Juni has actually narrowed its scope in the last year. The company initially launched catering to both e-commerce retailers and digital marketers, since the latter group also has a lot of similar dynamics, spending money in multiple jurisdictions and leveraging a variety of marketing and advertising tech. Now it has shifted its target customer, and the tools it's building, more specifically to the e-commerce vertical and the marketing that they undertake.

"We are focusing on e-commerce companies," El-Sabini said. "However marketing is an important function in all e-commerce companies."

The company launched during the pandemic, which was a windfall of sorts: There were suddenly a lot more consumers buying a lot more online, and e-commerce companies were scrambling both to connect with and sell to those audiences without going bust, so having a banking partner that could assist in that was partly what drove such strong growth for Juni.

Interestingly, and as you might expect, that need doesn't go away as the pandemic subsides. Growth is definitely now slowing down in that sector (dropping by at least 4% globally and continuing that way for the next few years, says eMarketer) and so e-commerce companies have to manage that, too.

"The cost base is generally under pressure, and we can offer credit with great insights into our customers' forecasting, so they understand the cash flow," and cash flow is king for these customers, he continued. "Something that we also see is fear in the markets. So if you can have a partner that is long term and can help you and understand your position that is obviously very important. We want long relationships with our customers."

Abu Dhabi's Mubadala Investment Company, the parent of Mubadala Capital, is a prolific fintech investor (it has backed Brex, SpotOn, GoCardless and many others), and Fatou Bintou Sagnang, the partner who led the investment, said that she and the firm evaluated a number of other players in the banking space focusing on SMBs before coming to invest in Juni.

"It started with looking at SMBs and fintech enablement and we were looking for companies that fit that thesis," she said in an interview. "We like companies that use tech in smart ways to decrease costs." She said they spent more than 9 months getting to know the young Juni and liked its focus on e-commerce. "We actually see a lot of parallels with Brex in the US. We came in with some experience doing this for sectors, and our thesis is that the next iteration in fintechs challenging incumbents will be more verticalization."