Investly
Pan-European Marketplace for Invoice Financing
- Location
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London,
United Kingdom
Categories: Finance & Payments Digital B2B
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Investment
sought: - £500,002
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Equity
offered: - 7.00%
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Investment
amount: - £679,085
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Valuation
(pre-money): - £6,645,459
Idea
Introduction
Investly helps European businesses finance their 30-180 day invoices on an easy to use marketplace that brings them the best price from multiple providers. As a result,
Businesses are able to:
• Take on more customers,
• Speed up their production process, and
• Avoid seasonal cash flow gaps.
Marketplace investors are able to:
• Get high returns (historic annualised weighted average of 10.6%),
• Invest into short duration asset class (typical financing period 30-40 days), and
• Finance invoices against debtors around Europe (€ and £).
The financing process is designed to be efficient and easy to use for both businesses and investors.
Intended impact
Reliable cashflow can help businesses grow faster. Investly's target customers would have to wait 56.7 days on average to get paid by their customers directly. This is the time they would have to wait before re-investing that money into their business. With Investly, they can be paid in just hours and invest the funds immediately to grow faster. Businesses onboarded from January 2017 have grown their turnover an average of 125% to date.
Our experience suggests that the invoice financing service that banks offer to large corporates is not always available to smaller businesses - Investly aims to offer this same service to SMEs who are not served by banks. Automated onboarding and credit scoring processes enables us to rapidly serve quality businesses whose credit needs are too low for banks to consider with their longer, manual processes.
Our marketplace investors are able to earn attractive yields on smaller investments with short-term lock-in and with the ability to spread the risk across multiple invoices.
Substantial accomplishments to date
FINANCIALS*
• €18m+ worth of invoices financed to date.
• 2700+ marketplace investors all around Europe.
• Autobidding functionality (enables to manage investor portfolio efficiently).
• 200+ business customers.
• 15% average month-on-month growth rate in 2017, and by Q4 £20k monthly revenue.
*based on unaudited management accounts.
PREVIOUS FUNDRAISING
€1.3m equity raised for Investly in previous rounds from (Speedinvest, Startup Wise Guys accelerator and angels).
PARTNERSHIPS & AWARDS
• Winner of the £50k Nesta Open Up Challenge Award to build future financial services on Open Banking API in collaboration with Barclays, Lloyds, HSBC, and RBS. http://www.wired.co.uk/article/open-banking-is-....
• Partnership with Telema e-invoicing platform to provide frictionless financing of e-invoices. https://www.investly.co/blog/investly-announces...
• Partnership with Estonian government owned KredEx credit insurance to support exporting companies.
ADVISORY BOARD
• Stefan Klestil from Speedinvest. Also in boards of Curve, Holvi, Wirecard, iyzico, Number 26, Payworks, Billie, Loot, FinCompare.
• Julian Kaljuvee from Founders Capital. Founders Capital also an investor in EstateGuru & Bondora.
• Ricardo Schäfer from Seedcamp. Also investor to Revolut, Bitwala, Prodo.AI.
To the best knowledge of the company, Investly's core business is not currently an activity regulated by the FCA. Investly does not invest any capital into invoices itself or on behalf of any third parties. Investly does not take client deposits or give any investment advice. The company will continue to monitor the regulatory requirements as the business grows.
Monetisation strategy
Investly is going to use Open Banking to work closely with partners like banks and alternative finance providers.
We intend to offer Investly's credit scoring engine and invoice financing to their existing business customers that their own business models prevent them from offering their full portfolio of services. This way, the businesses can grow faster to become corporate customers.
We charge a percentage fee between 0.5-1.5% from the invoice value.
Use of proceeds
30% to build up partnerships and integrations with banks.
30% to build out direct marketing channels to end customers in UK and Estonia.
20% to build out further integrations with invoicing platforms and accounting softwares.
10% to bring in a senior executives to our sales and marketing functions to ramp up growth efforts.
10% to add technical talent with machine learning and AI experience to our product team.
Market
Target market
Target customer:
• Established for 7-10 years.
• Current customers incorporated in UK or Estonia; soon, anywhere in Europe.
• Selling services or products to business customers in manufacturing, construction, wholesale/retail or logistics sector.
• Turnover between £200k - £3m annually.
• Has already deployed its own equity into business development.
• Family business or self-owned.
Characteristics of target market
Many Investly customers have either not used invoice financing before or have switched to Investly because of better financing terms and ease of use.
The following numbers represent the 'as is' market, but more than half of Investly customers have not used invoice financing before so we believe we are increasing the overall market size.
UK FACTORING MARKET 2016Q3 - 2017Q2
• £277b worth of invoices financed in total.
• £17.3b worth of invoices financed by an estimated 33,042 businesses with turnover up to £5m/year (Investly target customers).
• 56.7 day average financing period.
UK SECTORS BY NUMBER OF CLIENTS
26.6% Services.
26.1% Manufacturing.
24.1% Distribution.
6.4% Transport.
16.8% Other.
EUROPEAN FACTORING MARKET 2016
• €1.5tn worth of invoices financed in total.
• 179,675 estimated number of active customers.
• 63 day average financing period.
Marketing strategy
WORK WITH PARTNERS OUR CUSTOMERS ALREADY TRUST
BROKERS AND AGREGATORS
Investly brand ambassadors in the UK business community educate businesses about the available options and pass us prepared leads.
PARTNERSHIPS WITH BANKS
With the Open Banking API becoming available this year, we have already built out technical integrations with Barclays, Lloyds, Santander, HSBC and RBS. The next phase is to move into business partnerships with various traditional lenders in UK and Estonia to get access to large customer pools.
SATISFIED CUSTOMERS
Investly has a very high Net Promoter Score 72% (e.g a typical UK bank like Santander has 27%). We believe our customers value speed, ease of use and clarity in pricing and business terms. Such a high promoter score is bringing us a number of organic referrals from our existing customer base.
Competition strategy
We believe that n the customer segment, businesses with turnovers from £500k-£3m per annum are still underserved in their working capital financing needs.
Investly aims to be a trustworthy financial partner, who you can rely on. We are looking into how we can continue delivering lower rates, which we can do through our marketplace financing model, where professional investors, hedge funds and even smaller banks can start to finance the businesses directly.
Rather than competing with banks, we intend to partner with them to deliver an excellent customer experience to a large pool of businesses in need. We can do so without the customers having to leave their bank's online environment. With Investly, the same customer can grow faster into a prospect for other products offered by the bank.