With funding round closed during a pandemic, Cerebro Capital plans growth

Cerebro Capital combines tech and expertise to help businesses connect with working capital to carry out their plans.

“We want to remove the worry from CFOs about whether they can get a loan, which bank or bankers provide the best terms, the time to complete underwriting and all the questions related to that,” said CEO Matthew Bjonerud.

In late March, the Mount Vernon-based company closed on new funding that will enable its own growth, raising $4.8 million in new funding in the round, according to an SEC filing.

“We have a lot of ability to deploy this toward new initiatives and things that are going to help us to expand even faster,” said Bjonerud, who launched the company in 2017 after working in corporate borrowing with firms including Harbor East-based Laureate Education.

The round was led by Palo Alto-based Ulu Ventures and Grotech Ventures, which counts an office in Hunt Valley. Baltimore-based Sterling Partners, which was a previous investor, and Inner Loop Capital, which was a new investor, also joined the round. It’s the company’s second round of funding, bringing the total raised to about $7 million.

“It was an incredible reflection of how much confidence and excitement there was around investing in us, to have it co-led by Ulu Ventures and Grotech, which are hugely successful firms and to have it anchored in Silicon Valley and the East Coast is a great acceptance and really set us up for success,” Bjonerud said.

And, to add another dynamic, the round closed a few weeks into a global pandemic that led to a big economic slowdown. The CEO said the investment was in motion as the company was getting to finish up a first quarter in which over $800 million in loans were offered through the platform, but was getting closed in the weeks that the economic slowdown that is resulting from COVID-19 was starting to come into view. He in constant touch with investors as things were changing and ultimately the round that he said “exceeded our expectations” was closed intact.

“It just really shows how much opportunity there was and how much our investors resonated with the fact that our service is needed more than ever,” he said.

The company’s platform is now connected with 650 banks and non-bank lenders — the latter of which have “increased dramatically over last 10 years” as an option — so it allows visibility of potential loans across the market. With that data, it uses AI tools and employs team expertise to help match companies with borrowers and terms, as well as manage how the commitments that the borrower makes are fulfilled.

Cerebro found footing working with companies in the middle market, seeking to help with loans that are $2 million to $100 million in size. And there’s room to be useful now: The economic slowdown has created volatility in the markets as lenders get overwhelmed and seek to roll out new federal programs that provide relief. Cerebro’s platform can help navigate the requirements, and find the right terms.

“We recognize that the Paycheck Protection Program and the new Main Street Lending Program are going to be important,” Bjonerud said. “What we’re offering is giving them the ability to access lender networks and have more and increased chances of getting accepted and getting through.”

After growing from five to 10 employees over the last two years, Cerebro is planning to continue to hire in areas including tech, sales and marketing. It’ll also be investing in technology to enhance automation and analytics tools. The company is working with borrowers and banks around the country, so after working with Baltimore’s community of resources and borrowers, it is continuing to be based in the city while taking a national focus.

“Our objective is to keep growing,” Bjonerud said.