FAKTUS, the pioneering neobank dedicated to serving construction SMEs in Europe, has successfully raised €56 million through a combination of equity and debt funding. The latest financing round includes €9 million in equity from investors Lakestar and Foundamental, while up to €47 million in debt capacity has been secured through funds managed by Insight Investment alongside Fost Capital.
"We're thrilled to propel our mission forward with this significant investment, enabling us to bridge financial gaps in the construction sector," said Reda Kabbaj, co-founder of FAKTUS. The company has ambitious plans, aiming to finance €500 million worth of worksites in the upcoming 18 months and expand its presence across several European nations, including the UK, Germany, Spain, Italy, and Portugal by 2026. The target is to reach over 800,000 SMEs across Europe.
The construction industry, valued at approximately €2.5 trillion, remains one of the largest yet financially challenged sectors in Europe. Many SMEs in this field face a pressing issue: a staggering average wait of 85 days for payments while still needing to cover upfront costs for materials, payroll, and subcontractors. FAKTUS seeks to alleviate this strain through its innovative financial platform, tailored to meet the sector's unique needs.
"Our tools include real-time business accounts, invoice financing with integrated validation, and material advances that kick-start projects," Kabbaj elaborated. "With these offerings, builders are empowered to maintain project momentum without experiencing liquidity bottlenecks, which are often the root of delays and cost overruns."
Founded in 2023 by Kabbaj and co-founder Alexandre Pochon, FAKTUS leverages cutting-edge technology, including AI, to streamline operations. This tech enables the neobank to analyze contracts, read invoices, track schedules, and assess risks with remarkable efficiency, reducing what used to take weeks down to just two hours for a funding decision.
"Speed is crucial because 90% of construction firms struggle to access timely financial assistance," Kabbaj pointed out. The success of FAKTUS can be seen in the financing of over 470 worksites, supporting projects exceeding €100 million that range from educational institutions and hospitals to social housing developments, as well as significant sites like Roland Garros and the French Senate.
Pochon added, "Each financing decision we make is backed by detailed sector intelligence, ensuring that our solutions are finely tuned to the unique conditions of each project." This data-driven approach not only enhances decision-making but also helps mitigate financial risk for construction SMEs.
The recent €56 million capital structure reflects FAKTUS’s commitment to establishing a regulated framework conducive to scalability. With robust backing and a clear vision, FAKTUS is positioning itself as a crucial player in modernizing the financial landscape for construction businesses across Europe.
The potential of FAKTUS goes beyond just financial assistance; it embodies a shift towards a more streamlined and efficient construction finance ecosystem. As the company gears up to expand its reach and services, industry observers are keenly watching to see how FAKTUS impacts the construction sector in Europe. The commitment to support SMEs means that FAKTUS is not just about profitability, but also about enhancing project stability and overall industry health.