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Stuart Gentle Publisher at Onrec

Sonovate raises £20 million in capital funding

UK’s leading recruitment contract finance provider secures funding

Sonovate, the UK’s leading recruitment contract finance provider, has raised a £5 million Series A funding round led by Dawn Capital and supported by DN Capital, with a further £15 million in debt funding provided by Shawbrook Business Credit.

Richard Prime and Damon Chapple, former directors of a FTSE 250 recruitment agency, launched Sonovate to provide high-tech working capital solutions to UK recruitment companies. Unparalleled in the sector, Sonovate’s platform eliminates both the cashflow and administrative burden faced by recruitment companies working with contractors.

Sonovate co-CEO and co-founder Richard Prime comments: “Recruitment companies have always been early adopters of technology: they were quick to see the potential of platforms like LinkedIn, and firms like Reed have been active online for almost 20 years now.

“But as eager as the industry is to reinvent itself for the modern era, finance and the associated technology is yet to catch up. Agencies providing contract solutions have relied on outdated, inflexible bank products which don’t provide the automation and technology that agencies are crying out for.

“We launched Sonovate to overcome this challenge. This capital investment will help us develop our product, expand our team, and launch into new territories including mainland Europe and North America over the next year.”

Sonovate was founded in London in January 2014 and also has an office in Cardiff, Wales.  The business currently employs 45 people.

Josh Bell, partner at Dawn Capital who will also join the Sonovate board, comments: “Recruitment agencies in the UK and across the globe face many unnecessary obstacles when it comes to securing working capital – and Sonovate is the global leader for companies using technology to make working capital available in a seamless, automated way.”

“Finance for recruitment agencies is a large, fast-growing market: the global recruitment sector is worth $350 billion annually, expected to expand by a further 7% in 2016. The UK alone is set to grow 6%. The rise in flexible and contract work – there are 11 million contractors in the US alone – has increased appetite for a solution like that offered by Sonovate.“

Josh Bell adds: “There’s more opportunity in recruitment and the wider contingent staffing sector than ever before, and Sonovate is well-placed to seize it. The company has a great product, a reputation for excellent customer service, and is in a strong position to make an impact internationally.

“The UK is a world-leader in fintech and we firmly believe that Europe will continue to produce strong global competitors in the technology field. Dawn Capital is delighted to lead the Series A investment in Sonovate.”

 

Steve Schlenker, Managing Partner at DN Capital, comments: “We at DN Capital believe there has been relatively little innovation in the financing side of many traditional businesses such as recruitment consulting, so are particularly excited to be backing Richard, Damon, and the rest of the team at Sonovate to create the world leader and innovator in this space”