FinTech business lender Outfund has announced the close of a £37m late seed round of capital, including debt and equity.

The firm positions itself as an alternative source of finance to bank loans and VC investment.

Its technology is designed to take the bias out of lending and improve the terms for financing by basing decisions solely on businesses revenues and performance.

It’s algorithm pulls information from multiple data sources to determine how a company performs. It is then designed to de-risk the proposition, making it possible to offer cheaper funding with longer pay terms and a flat fixed fee from 5%.

With this investment, Outfund is pledging to lend more than £100m to over 5,000 businesses in the next 12 months and will increase its lending limit to £2m.

Outfund also said it plans to make investments into new products, such as working capital and revolving credit, and team growth.

The seed round means that Outfund is now the UK’s largest revenue-based finance company.

The funding round was led by Fuel Ventures and sees TMT Investments and Force Over Mass also invest.

Daniel Lipinski, founder and CEO of Outfund, said, “As a second time entrepreneur myself, I experienced first-hand the complex, timely and often imbalanced nature of the old-school financing routes.

“I knew there was another way and so decided to build it. Our ambition is for Outfund to be the place to go to grow your business without compromising your equity or wasting time fundraising.

“This is why we have spent time developing a way to make the process of securing money for growth easier, fairer and most importantly, faster. Our approach has been warmly received by founders and directors alike and so now we’re looking at how we can open this up to more businesses and continue to be part of their journey to success for a long time.”

Outfund can deploy between £10,000 and £2m of funding and is available to businesses that take online payments, have a minimum of £10,000 monthly turnover and have been trading for at least six months.