Felux, an online B2B marketplace and supply chain platform for steel and other metals, has raised $19 million in a Series A funding round, according to a Friday (June 3) press release.
Based in Cleveland, Felux offers three products: a digital platform to help give suppliers a presence online; a marketplace to buy and sell materials; and a materials and procurement platform for large manufacturers, the release stated.
The company is poised to expand into adjacent markets such as aluminum, copper, stainless steel and scrap metal, and plans to add several other commodities and physical goods in the next two years, according to the release.
“The steel and metal market is one of the last remaining major industries to turn digital with more than 95% of transactions still offline and paper-based,” the company said in the release. “Steel companies and manufacturers grapple with outdated quoting and negotiation processes and a lack of transparency on the movement of goods.”
PYMNTS research has shown that an average of 25% of B2B payments are made using paper checks. While the industry-specific numbers have remained highest in the commercial real estate sector — 34% — PYMNTS’ study found that 26% of industrial and manufacturing B2B payments are still made using paper.
Read more: 25% of B2B Payments Are Made by Check
PYMNTS research also showed that almost 93% of U.S. firms with $25 million in revenue or more are integrating digital technologies into their accounting operations due in part to the pandemic. COVID-19 has provided an incentive to upgrade invoicing and payment practices that have long been bogged down in inefficiencies as well as manual and paper-based processes, including a major reliance on checks.
Felux said in the press release that there is a significant market opportunity in digitizing the industrial supply chain for metals, as the American steel and aluminum market is worth about $385 billion, with the global metal market expected to reach higher than $4.6 trillion in 2025.
The funding round was led by EquipmentShare, according to the release. Participating investors included Signia Venture Partners, Suffolk Technologies, Expa, Lightbank, 8VC and JumpStart Ventures.