Scayl, a debt financing platform launched by a team of financial veterans, has stepped out of stealth mode with €100 million in funding. The platform aims to address a significant challenge faced by European Fintech lenders: securing access to flexible and cost-effective debt financing.
Talking about debt financing, back in January this year, Peter Thiel-backed German B2B BNPL Mondu got additional €30M debt financing for more European expansion.
What does Scayl actually do and why are they different?
Unlike traditional debt providers, Scayl sources capital exclusively from banks, a resource previously available only to larger lenders. This approach offers smaller Fintech lenders several advantages. Firstly, it translates into more favourable terms and faster negotiation timelines compared to traditional methods.
Secondly, by connecting to Scayl’s platform, Fintech lenders can access funding more quickly to launch new credit products. Additionally, Scayl facilitates a two-way data exchange between banks and Fintech lenders, streamlining the loan funding process.
Scayl goes beyond simply connecting lenders and banks. The platform leverages advanced data analytics, collecting 10,000 times more data points than competitors. This data is then processed using predictive AI to provide insights on future credit performance, minimising risk exposure for partner banks.
How is the startup catering to a growing need in a changing market
The European macroeconomic environment is presenting challenges for businesses, particularly SMEs. Extended cash conversion cycles are impacting working capital requirements, forcing many smaller businesses to turn to Fintech lenders for liquidity solutions that traditional banks are less willing to provide. Scayl identifies a significant opportunity within the SME lending space, particularly with the rise of embedded finance.
While the SME segment is a key focus, Scayl also sees potential for innovation in consumer lending. The platform highlights the growth of various Buy Now, Pay Later (BNPL) models and leasing options, reflecting a shift towards a subscription economy driven by rising living costs.
Future expansion plans: US on the horizon?
While acknowledging the attractive market size in Europe, Scayl doesn’t rule out future expansion to the US, a region with a well-developed credit market and a dynamic Fintech scene.
Data security: A top priority
Understanding the sensitive nature of financial data, Scayl emphasises its commitment to data protection. The platform adheres to relevant legislation in each market it operates in and utilises industry-standard data encryption technology to safeguard against breaches.
The team behind Scayl
Scayl’s founders, Medjit Yalmaz (CEO), Patrik Blomdahl (COO), and Jatin Goyal (CTO), bring a wealth of experience from venture capital, private credit, Fintech lending, and traditional finance. Their firsthand understanding of the challenges faced by Fintech lenders in securing debt financing fueled their vision for Scayl.
Building a network of financial institutions
Scayl acts as a bridge between Fintech lenders and banks. The platform facilitates seamless connections while maintaining integrations with existing bank and credit institution partners. This allows for efficient data exchange and loan funding processes. Notably, Scayl has already secured interest from nearly 100 lenders across Europe and a partnership with a northern European bank to provide initial funding.
Changing the debt financing landscape for Fintech
Prior to Scayl, Fintech lenders often faced lengthy negotiations and unfavourable terms when seeking debt financing. Medjit Yalmaz, Scayl’s CEO, highlights the company’s mission to streamline this process as he says “With Scayl, we listened to what Fintech lenders said they really needed, and built a platform that allows us to provide them with debt capital more efficiently, at lower costs, and on founder friendly terms.”
What we think about the startup
The €400 billion funding gap in Europe presents a significant opportunity for Fintech lenders, according to Scayl. By providing these lenders with access to flexible and cost-efficient debt financing, Scayl aims to empower them to capture this market share and potentially create a new wave of European Fintech unicorns.
Having established an initial network of banks and Fintech lenders, Scayl is focused on rapid expansion. The company aims to build a comprehensive network of financial institutions across Europe, encompassing diverse asset classes, credit products, and jurisdictions. This robust network will serve as the foundation for Scayl’s potential future expansion into other regions.
Scayl’s emergence signifies a new chapter in European Fintech lending. By addressing the funding gap and streamlining the debt financing process, the platform has the potential to empower Fintech lenders and foster innovation within the European financial landscape.
