Partech Ventures and Idinvest Partners are backing the growth efforts of SME and mid-cap foreign currency exchange Kantox through a €6.5 million (£5.4 million) deal.

The London-based business, which was set up by former Deloitte consultant Philippe Gelis, works on the premise that it matches businesses with other companies who have transaction requirements. 

A European business importing goods from China and paying in US dollars would be able to find another company located in Europe, exporting goods to the UK which has dollars to sell in exchange for Euros.

The €6.5 million secured will be used to build on its presence in Europe as well as developing the technology it already has in place.

The financial technology company’s previous funding efforts saw it win a €25,000 start-up prize, close a €150,000 seed round in 2011 when it became regulated and then net a €1 million investment in the summer of 2012 to build its team and being scaling up.

Gelis, CEO of Kantox, says that the company will now begin to build its sales teams in Germany, France, Spain, Italy and the UK.

‘The internet brings unprecedented possibilities for SMEs to trade internationally. FX, and an ability to hedge, is one of the key barriers these companies face as they set their sights overseas – we are determined to help them overcome this,’ Gelis adds.

‘Although the FX market is generally considered to be highly competitive and efficient, this is not an accurate representation of the reality. Large corporates enjoy access to really competitive rates, while SMEs and mid-caps – who usually don’t have access to live rates or an in-house FX expert – are overcharged by a banking oligopoly which promotes opacity.’

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Since founding in 2011, Kantox has traded $300 million through its platform, with its biggest client reportedly saving €400,000 last year. The business now has some 500 corporate clients and is predicting processes of over €1 billion euros in the coming 12 months.

New backer, Partech Ventures, which has previously backed companies such as DailyMotion, Qype and Verifone, invests in ‘high-growth potential internet and information technology firms.

Philippe Collombel, managing partner at the investor, says, ‘Kantox is one of the most remarkable actors within the trend of tech companies dedicated to financial services.

‘We are very happy to support this amazing team in the development of their offer and are convinced of their ability to become a major player in the foreign exchange market.’