NextFin News - Twinco Capital, a Madrid-based fintech specializing in supply-chain finance, has secured €165 million ($190 million) in a fresh funding round to expand its lending capacity for global suppliers. The capital injection, announced on Tuesday, consists of a mix of equity and debt, aimed at addressing the persistent financing gap that often leaves small and medium-sized enterprises (SMEs) in emerging markets struggling to fulfill large purchase orders.
The funding round was led by Quona Capital, a venture firm focused on financial inclusion, with participation from existing investors including Working Capital Fund and Mundi Ventures. According to Manuel Baigorri of Bloomberg, the facility will allow Twinco to scale its unique model of providing liquidity to suppliers at the very start of the production cycle—specifically when a purchase order is issued—rather than waiting for the delivery of goods or the issuance of an invoice.
Sandra Nolasco, CEO of Twinco Capital, stated that the company’s mission is to reduce the $1.7 trillion global trade finance gap. Nolasco, a former corporate banker with over 20 years of experience in trade finance, has long advocated for shifting the risk assessment from the supplier’s balance sheet to the strength of the commercial relationship between the buyer and the seller. This approach, while innovative, remains a niche segment of the broader trade finance market, which is still dominated by traditional banks focusing on post-shipment factoring.
The fintech’s model relies on data analytics to assess the performance history of suppliers, allowing it to offer funding that covers up to 60% of the purchase order value upfront. While this provides a critical lifeline for manufacturers in sectors like apparel and electronics, some market analysts remain cautious. Critics of early-stage supply-chain financing point out that providing liquidity before production is completed carries inherent operational risks, such as quality disputes or shipment delays, which can complicate the recovery of funds if a transaction fails.
Despite these risks, the demand for alternative trade finance is growing as global supply chains face continued pressure from geopolitical shifts and inflationary costs. Traditional lenders have increasingly retreated from SME lending in developing regions due to stringent regulatory capital requirements and perceived high risk. Twinco’s expansion suggests that private capital is stepping in to fill this void, though the scalability of such models depends heavily on the continued accuracy of their proprietary risk algorithms and the stability of global trade volumes.
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