Stenn uses big data and analytics on businesses and matches them with algorithms that account for several other aspects, working out eligibility for loans up to $10 million. Simultaneously, it also leverages its institutional network and other major lenders for ensuring capital flow for the same. It has now raised $50 million in equity for scaling up its business. Private equity player Centerbridge is putting in the funds while valuing Stenn at $900 million.
Stenn started its journey in 2015 and has already funded close to $6 billion in loans throughout 74 nations. $1 billion of this tally was sanctioned in 2022, with a unique approach of using technology to improve a hitherto-neglected category, according to the company CEO and founder, Greg Karpovsky. He added that finance demand in the category stands at $3.6 trillion, according to Accenture, while it will increase to $6.1 trillion over the coming four years. He also stated that the key funding source is the conventional banking network which comes with its own set of challenges. Banks across developed nations mainly focus on finance for the supply chain, while developing nations are not as developed yet. Hence, companies in this category do not get banking solutions as per their requirements.
Some of the entities in the fintech space, that offer loans to SMBs include Finally, Kabbage (integrated into Amex now), Mercury, Lili, NorthOne, Viva Wallet, Brex, Juni, Rho, Hatch (now known as Nearside), Novo, Open, and many others. Yet, Stenn is tailoring solutions not only to usual SMBs, but also entities operating at a cross-border level. These include global marketplace sellers, or companies offering supplies to them. Their companies are usually smaller than MNCs, although larger than regular SMBs at the same time. Karpovsky feels that domestic small businesses are comparatively smaller in size. He also adds that the borrowed amounts could vary between $30-50,000 on average. Stenn makes use of the definition given by the World Bank, i.e. which makes any business with up to $120 million in yearly sales, suitable for its category. The company offers loans up to an amount of $10 million, with turnarounds of 48+ hours between the applications to the approval timeline. Loan amounts are usually between $500,000 and $1 million. The Co-Head at the Centerbridge European division and senior Managing Director, Jed Hart, stated that the company has adopted a disruptive approach toward global trade and finance supply while offering a hugely scalable value proposition