Since its initial funding, Satago has evolved in to a platform where small and medium sized businesses can automate their credit control. We are still interested in the late-payment data - the current model is that the credit control tool is free to use if companies share the data about when they get paid. We can then use this data to help them make credit control decisions.
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.
Satago automates credit control so companies can spend less effort on chasing their debtors, and more time chasing new customers and doing the work they love.
We still have a vision of sourcing this valuable late-payment data, but first we are concentrating on building the ultimate credit management tool for SMEs.
Substantial accomplishments to date
Satago MVP launched.
Recruited a technical co-founder from a top tech company.
Techcrunch Battlefield finalist.
Web Summit semi-finalist.
Entered Seedcamp accelerator programme.
Approx 450 registered users.
Started chasing first debtors on behalf of users (with positive results!)
Raise ~£600k seed-investment from a range of value-add investors.
Businesses can use Satago for free if they agree to share data about when they get paid. They receive one "credit" for every "payment experience" they share with Satago. One credit can then be used to chase one invoice for payment by email.
Further services, such as hard-copy letters, credit managers on the phone etc., can be purchased for extra credits.
If a business doesn't want to share payment behaviour data, or needs to buy extra credits, they can do so for £1/credit. We are building credit bundles and a subscription model.
Use of proceeds
The Seedrs listing is for Seedrs investors' pre-emption rights as part of a larger seed-investment round of £600,000.
Most of the proceeds will be spent on the team - two founders, two back-end developers, one user-interface designer, and one business development executive.
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. Whilst it's difficult to estimate the number of SMEs that are primarily B2B, we assume conservatively there are 2 Million combined SMEs and freelancers in UK that could use Satago.
We 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.