- Investment sought:
- Equity offered:
Satago plans to be a platform where firms submit information about how quickly their business customers pay their bills. Data would be submitted directly and easily via integration with accounting software. Data collected would include date invoice issued, terms agreed, date invoice due, value of invoice, date actual payment. Payment data would be anonymised and aggregated to give overall payment scores for companies, and more granular data would be based on individual payments to understand payment behaviour. Companies would pay for access to payment reports on potential customers.
Bad debts and late payment of invoices are endemic problems for UK businesses, causing cash flow problems and an estimated 1 in 4 company bankruptcies in Europe. Traditional credit reports do not tell companies when someone is likely to pay their bills. It is hoped that widespread adoption of Satago will a) bring transparency to company payment behaviour, thus allowing companies to anticipate late-paying customers, and b) encourage companies to pay their bills according to agreed terms by both exposing their payment practices and offering special deals with partners to those companies with the best ratings in Satago. We hope that looking at a Satago payment report will become a standard part of B2B business transactions. Our aspiration is that Satago has a measurable impact on the average number of days UK companies take to get paid.
Substantial accomplishments to date
Clickable mock-up developed: Business concept researched and validated in several MBA projects.
Discussions held with several accounting platforms.
Discussions held with several industry organisations.
2nd place in Oxford University's "Idea Idol"
Semi-finalist in Said Business School's Venture Fund competition.
Combination of freemium and subscription. For free (after basic registration) users could see an overall "traffic light" rating for a company. If it is Green - all data Satago holds would suggest that the company is good to deal with. If Amber or Red, would suggest company pays to see detailed report about company. Reports purchased PAYG, or monthly subscription for regular reports. To encourage data submission, companies would be given credits for submitting data which can then be used to obtain reports for free.
Furthermore, the data in Satago could be used to offer targeted business financial services, such as credit insurance, providing further revenue streams.
Use of proceeds
We plan to develop 'minimum viable product' to prove concept.
Design and HTML
Operations and contingency.
All small and medium sized enterprises (SMEs) and freelancers/contractors that work business-to-business. There are 2 Million SMEs in the UK, plus around 1.5 Million freelance workers. Difficult to estimate number of SMEs that are primarily B2B, but assume conservatively there are 2 Million combined SMEs and freelancers in UK that could use Satago.
Plan to initially target those sectors that are likely to be early adoptors of Satago: digital and creative industry freelancers and agencies.
Characteristics of target market
71% of firms had suffered from late payments in the last year, Small firms are paid an average of 41 days beyond agreed terms, UK firms are owed £62bn in late bills (£15bn is more than 120 days overdue), The EU estimates that 1 in 4 bankruptcies are caused by late payments.
We believe that currently the only option for businesses is to buy business credit reports that are based on old filed accounts and don't actually say anything about payment timeliness.
As a service dependent on user-generated content, the biggest challenge for Satago would be to accumulate a critical mass of data from users. This would be achieved primarily through partnerships with accounting software provider and business organisations such as the Federation of Small Businesses, who regularly highlight bad payment as one of the main problems affecting their members. Discussions with a number of business and industry organisations have been positive and supportive of Satago. Once we integrate with accounting software APIs they would promote Satago as another useful add-on for their platform in order to boost their own 'ecosystem'.
In addition it is hoped that the nature of the service will prompt small businesses and freelancers to encourage their peers to submit data. Indeed we intend to build refer-a-friend incentive schemes (i.e. receive free reports if you recommend a friend who joins etc.).
Satago's barrier to entry will be dependent on building a critical mass of data. We would do this by having integration with the widest possible number of accounting platforms and partnerships with business organisations.