Charlotte-based fintech startup Foro has raised nearly $4 million in additional funding, according to a U.S. Securities and Exchange Commission filing.
Foro — which was created to make commercial lending more equitable — has various backers, including local leaders such as Hugh McColl Jr., former CEO and chairman of Bank of America Corp. (NYSE: BAC). Recurring investors who led its latest funding round include TTV Capital, Fin Capital, Correlation Ventures and AME Cloud Ventures. New investors include Gaingels and B3 Capital, a Foro spokesperson confirmed.
The startup began raising the funds on March 10, according to the filing.
The $4 million capital boost comes after Foro announced in January its close on $8 million in Series A funding. That was the company’s first equity raise, which helped the startup launch its digital commercial lending platform nationwide.
Foro said it plans to use the new funding to expand its marketing efforts and continue to enhance products to improve its commercial lending services.
Despite economic uncertainties and challenges, Charlotte's startup ecosystem has managed to avoid major headwinds. The same applies to Foro, which told CBJ it was still able to secure funding due to its investors believing in its mission: to “democratize access to capital for growing businesses.”
Foro also said that even in periods of uncertainty, lenders still need capital to flow.
“We also have a strong and diverse group of investors whose partnership and perspective makes us better,” the company added.
However, a Foro spokesperson did say the company is facing macroeconomic headwinds with small-business loan approval rates at a steady decline — a trend that could especially hurt minority-owned businesses.
“But we believe we were built to help businesses and lenders navigate this type of economic uncertainty and forge the relationships they need,” the spokesperson said.
Foro, founded in 2019, operated in stealth mode until its widespread launch two months ago. The fintech company serves small and midsize businesses in need of commercial loans between $1 million and $20 million. Foro provides businesses with access to capital by connecting them with a financial institution that meets their specific needs. The startup achieves that by using modernized data and technology to make the way businesses explore, evaluate and choose a commercial loan less time consuming.
Businesses in need of capital utilize three steps: first create a profile, connect with commercial banks that match a company’s specific needs and then select the right lender with guidance from Foro’s network of financial experts.
Dave Godsman, founder and CEO of Foro, previously told CBJ the time is right to expand its footprint given current uncertainties in the economy. He said that banks typically find it more challenging to find the right businesses to lend to during a recession because risk usually rises.
“The fact that we’re emerging now, in an unpredictable market, is not a coincidence,” Godsman previously said. “Our platform delivers a more streamlined and objective process for commercial lending at a time when it’s needed the most.”
