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Madrid’s Twinco Raises $12M to Finance Supply Chain SMEs

Twinco Capital has closed on a $12 million funding round roughly two years after raising $3.7 million.

The global supply chain finance firm covers funding from the start of the production cycle from the purchase order to final invoice payment. The Spanish startup also plans to raise a $100 million debt facility before the end of March.

CEO Sandra Nolasco and chief operating officer Carmen Marín founded Twinco Capital in 2019 to help big companies mostly in retail and apparel unlock funding for their global suppliers. Financing can include advancing up to 60 percent of the purchase order value upfront, with the rest paid on delivery. Twinco said decisions on funding, and the process itself, are usually made within 48 hours. Users have the freedom to cancel, replace or otherwise tweak their purchase orders without risking their Twinco financing.

More than 100 suppliers in 12 countries including Bangladesh, China, Pakistan, South Korea, Turkey, Thailand, Vietnam, Indonesia and Spain are active on the platform. Twinco’s model uses machine learning to evaluate quality and strength between buyers and suppliers, balancing traditional financial risk with commercial performance and ESG (environmental, social and governance) data.

Twinco works with European and Latin American retailers who buy over $10 billion annually of manufactured products mostly from small-to-medium enterprises (SMEs) in emerging markets.

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“If we are to have competitive and socially responsible supply chains on a global scale, suppliers need access to affordable financing from the very beginning of production, starting with the purchase order,” Nolasco said. “Extraordinary events, such as those experienced these past years, have revealed the fragility of supply chains, which are historically unable to adapt to the complexity of global production networks. At Twinco, we propose a radical change in how to use finance as a tool to proactively transform global supply chains, to foster the participation of SMEs, improve efficiency and ensure responsible sourcing practices.”

Marin said the new funding will help the company extend its geographic scope and data capabilities. Twinco has started its “first sustainable-native supply chain finance program—the Twinco ESG Tilt, where business intelligence is directly linked to beneficial purchasing and funding conditions,” she added.

Companies such as PVH Corp. and Walmart work with HSBC Bank USA to provide suppliers with access to funding based on ESG targets. And supply chain financing for SMEs has become an important category in the area of fintech, with Li & Fung’s LFX launching Air8 as one example.

Left to right, Stephanie Nolasco and Carmen Marin

Twinco’s equity and debt round was led by Quona Capital, which includes participation from Working Capital and from existing investors Mundi Ventures and Finch Capital. Zubi Capital provided venture debt.

“Twinco is focused on a significant pain point in the massive and underpenetrated market that is supply chain finance,” said Monica Brand Engel, Quona co-founder and managing partner. “At Quona, we’ve been incredibly impressed by the strength of this founding team and its business model, and we’re excited to be part of their journey to provide much-needed and affordable supply chain finance to help responsibly fuel the economic gains of emerging market suppliers.”

Both the fintech firm and its lead venture capital investor are female-founded firms.