|04/29/2020||Fundry donates $25k to NJ food bank|
|04/02/2020||Fundry supports local SMBs, PD w/ donations|
Jersey-City based Fundry made a $25,000 donation the Community FoodBank of New Jersey this week. CFBNJ is an organization that “fights hunger and poverty in New Jersey by assisting those in need and seeking long-term solutions.” In addition to the over 40 million Americans who struggle with hunger every day, an estimated 17.1 million more people will experience food insecurity during this crisis, the organization says on its website.
— Comm. FoodBank of NJ (@CFBNJ) April 28, 2020
Fundry, a small business finance provider, is helping to feed police officers in Jersey City. A tweet sent out by the City of Jersey City twitter account said that the company is buying meals at local small businesses to provide to police stations every day for the next 2 weeks.
Amelia’s Bistro, described as a modern American restaurant and bar in the Paulus Hook section of JC, was pictured making a delivery to the Eastern District on Thursday as part of the Fundry donation.
Nasan Ishak of @AmeliasBistroJC delivers lunch to @JCPoliceDept East District. With a donation from YellowStone Capital & @FundryC, meals will be provided to stations each day for 2 weeks. This supports our #JCFrontline responders and restaurants across #JerseyCity. #JCresponds pic.twitter.com/OpIkip2IDx
— City of Jersey City (@JerseyCity) April 2, 2020
Fundry has secured a new $75 million credit line, according to the company’s CEO Isaac Stern. The transaction was facilitated by Brean Capital and Pi Capital.
Fundry is commonly known by one of their subsidiary companies, Yellowstone Capital. According to a document obtained by deBanked, the company did more than $40 million in deals last month, with the vast majority funded in-house. The positive announcement follows their recent big move from NYC’s financial district to Jersey City, NJ, after being wooed to the state with tax incentives in return for creating jobs.
While confidence has retreated from online consumer lending after the scandals at Lending Club, specialty tech-enabled commercial finance companies, some of whom specialize in merchant cash advance, are still finding enthusiasm from institutional investors. Just over the last three weeks, Bizfi secured a $20 million investment from Metropolitan Equity Partners, Pearl Capital secured $20 million from Arena Investors, and Legend Funding secured a $3 million debt facility from Ango Worldwide. That’s $118 million invested into a very specific niche industry in less than a month.
Fundry alone, facilitated $422 million in funding to small businesses just last year.
Fundry, the parent company of Yellowstone Capital and Green Capital, hosted a red carpet event last Thursday evening in New York City where they presented a donation of $25,000 to Kiva. Kiva is a non-profit organization with a mission to connect people through lending to alleviate poverty.
The event, which also celebrated their 2015 success, was attended by more than 300 people. All told, Fundry originated nearly half a billion dollars in small business funding for the year.
‘Tis the season of giving for Fundry’s Isaac Stern and the dozens of folks that attended the December 5th winter fundraiser at his home in Hillside, New Jersey. The event, which served up 550 pounds of barbecue and included a Scotch taste testing bar hosted by representatives of Glenfiddich, raised over $60,000 for Hatzalah of Union County, a local non-profit all-volunteer emergency medical service organization.
Founded in 2004, Hatzalah EMS provides basic life support in medical emergency situations. They cover Union County NJ including the towns of Elizabeth, Hillside, Union, Roselle and Linden. Today, Hatzalah is staffed with 3 ambulances, 24 EMTs and 18 dispatchers all under the medical direction of a physician and two paramedics.
Hatzalah Chief Yudi Abraham told deBanked that Yellowstone Capital (a Fundry subsidiary) has been a long-time supporter of their organization. A few years ago, when the squad was undergoing a transition of directors, Chief Abraham reached out to Isaac Stern for financial help. At the time, Hatzalah was in serious need of replacing an older ambulance as well as covering monthly operating expenses. “Isaac didn’t waste any time and sprang right into action,” says Chief Abraham. “He immediately convened his employees and his associates and came through for us in a huge way.” Yellowstone Capital raised the funds in under two days for Hatzalah to buy a fairly used ambulance. Ever since then, Stern and Chief Abraham have been working closely together to ensure that other expenses were covered. Over the years, Yellowstone Capital has helped donate the funds to purchase two additional ambulances that currently make up Hatzalah’s fleet. The Yellowstone Capital name appears on the side of each of them.
The most recent event kicked off with a $10,000 personal donation from Stern, prompting others to give too while enjoying the festivities.
“With the help of Yellowstone Capital we are able to maintain our level of service and continue providing the best possible emergency care for our patients,” said Chief Chaim Cillo. “We at Hatzalah will forever be most appreciative for such an incredible company that cares and gives back to the community in such a large way.”
Stern and Yellowstone were also presented an award for their continued generosity.
In attendance at the event were Fundry employees, friends, family members, and others from the non-bank finance industry.
From left to right: Andrew Hernandez of Central Diligence Group, Sean Murray of deBanked, and Andy McDonald of Yellowstone Capital/Fundry
Hatzalah means “rescue” or “relief” in Hebrew and for many guests the event fell on the eve of the Hanukkah holiday. The volunteer EMS crew of course helps all people in need of care.
“Our pay,” said Chief Abraham, “is helping our patients and saving lives.”
Though neither company has made an announcement, deBanked has learned that FinSight Ventures, a venture capital firm that was a late stage investor in Lending Club, has acquired a stake in NY-based Fundry. As reported last week, Fundry is the newly formed parent company of Yellowstone Capital and Green Capital. Combined, they have originated more than $1 billion in small business funding since inception.
It was a small piece of equity, a single digit percentage share of ownership, said a source with knowledge of the transaction. In return, Fundry reportedly got a big boost in their valuation, though we were unable to ascertain a figure.
FinSight participated in Lending Club’s $125 million equity round back in May of 2013 that gave the company a $1.55 billion valuation and put them on track for an IPO. They were part of another equity round with Lending Club in April, 2014.
The transaction with Fundry is a nod to the industry that merchant cash advances have a lot more room to grow and perhaps a signal that Fundry is also on some kind of track.
With Yellow and Green together, the business financing industry just got a little bit more colorful.
Yellowstone’s CEO Isaac Stern and President Jeff Reece have become Fundry’s CEO and President respectively.
“We have a solid foundation and a very successful business model,” Stern said. “But to maintain a position of leadership in this industry, we need to grow and we are evolving.”
Yellowstone Capital has been the subject of several news stories lately, most recently by being approved for up to $3.3 million in tax credits to move their business from New York to New Jersey.
In April, it was revealed that Stern had led a management buyout backed by a private family office that made Stern the only remaining co-founder to retain an equity stake. And in June, the industry learned that the company had originated more than $1.1 billion in deal flow since inception, ranking them high above many of their more well-known peers.
The funding leaderboard which debuted in deBanked’s May/June magazine issue and was broadcast to attendees at the 2nd Annual AltLend conference in New York City, was in many ways a turning point for the industry.
“I would think there are many more branded funders that would have made the list but didn’t,” said Arty Bujan, Managing Member of Cardinal Equity. “Most shocking is Paypal’s $500 million.”
Richard Battista, Vice president of Business Development at theLendster commented on the eye-opening figures of the industry’s largest players in general. “This is a reflection of the explosive growth that the industry is experiencing at the present time,” Battista said. There is a huge demand for funding from small businesses, who have consistently expressed interest in trying out new funding options.”
Perhaps the story of Yellowstone Capital’s rise can best be explained by Grant McCracken’s Five Stages of Disruption Denial. McCracken, who is a Canadian anthropologist and author, known for his books about culture and commerce, explained the theory behind these five stages in the Harvard Business Review in April, 2013. They are Confusion, Repudiation, Shaming, Acceptance, and Forgetting.
Yellowstone Capital confused their competitors when they were first founded in 2009 by substituting split-processing payments for ACH to high-risk merchants. Very few people within the industry understood why they were using the ACH network over relationships with credit card processors that everyone else relied on.
That of course led to the repudiation stage where people thought they were crazy and that their model wouldn’t work and segued into shaming where the concept of providing working capital to high-risk businesses was perceived to be something that no one should do.
Through it all, Stern and his team believed many of America’s small businesses were still being overlooked and underserved despite non-bank financing and online lending growing by leaps and bounds.
“At what point do we stop helping small business?” Stern said to deBanked in response to an inquiry about whether or not some businesses are simply unfundable.
Today, we are in between the Acceptance and Forgetting stages. The ACH debit methodology has almost entirely replaced split-processing and dozens of funding providers claim to specialize in high-risk deals, the very same kind that the industry years ago didn’t understand and resisted.
Yellowstone Capital will serve as Fundry’s ISO relationship arm while Green Capital will serve merchants directly.
“2015 is our biggest year yet, but we really see it as a year of block and tackle work to set up for what needs to be done in 2016 and beyond,” said company president Jeff Reece.
“Yellowstone’s success will simply become the baseline for what Fundry is about to do.”
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