Sramana Mitra: Why are you not involved in transactions where it’s a large company buying from a small company?
Eyal Shinar: Because of the point you just raised. Interestingly enough, some larger companies, not as big as Apple, reach out to Fundbox as a seller. We already have agreements in place, but it’s not public yet. They’re asking us to be the provider of terms of their business buyers.
When the buyer is a smaller business, Apple-like companies would like to sell more. The value proposition for Apple is we’re going to sell more and we’re going to have a more structured way to look at collections and receiving payments.
Those companies are coming to Fundbox as customers from the seller side; not from the buyer side. When there’s a scenario where the buyer is Apple and the seller is a small business, they still have a way to use Fundbox which is a different product that we’re offering.
It’s basically just a pure credit product. You know that you’re going to get paid from Apple, but you also know it’s going to get 100 plus days. In the meantime, you can get credit from Fundbox to reach that 100 days.
Sramana Mitra: You should try to figure out how to bridge that workflow gap with large buyers operating with small sellers because the value proposition there is the strongest. The credit rating issue is very smooth.
I can speak from experience of running small businesses my entire career that cash flow is a very big deal. When it’s a large buyer, waiting 90 days for cash is absolutely unnecessary. If you can crack that gap, that is going to be the most useful for small businesses.
Eyal Shinar: I agree. That’s the other side of the business. That’s where we started. Most of our customers today are with us to get access to that cash flow. I mentioned earlier that there are two paths to the distribution. One is Fundbox Pay.
The other one is the platform approach. We’re going to the bigger platforms. Intuit is one of them. It could be Fiverr. It could be Wix. It could be Freshbooks. Their end customer is a small business.
Sramana Mitra: That’s not going to solve the problem. You’re going to need to get into the workflows of the larger customers and their ERP systems. You need integration with all the payment systems that the large customers use.
Eyal Shinar: We have 250,000 customers that beg to differ. They’re all using that product. It’s not embedded into the transaction workflow, but they’re getting access to credit and bridging this gap.
Sramana Mitra: I’m not saying that you’re not providing value; I’m saying you will not be able to crack the problem of large buyers working with small sellers unless you create a workflow integration with the ERP systems that the large buyers use.
Eyal Shinar: I would also disagree with that. That problem is less worthy of cracking. What I mean by that is, you’re running up the mountain if you’re trying to insert yourself into a company like Apple.
I’ll give you some examples of companies who are trying to do that. There’s a company that’s called Avidxchange. There’s a company called Tradeshift. There’s also Ariba. They all try to embed themselves into the buyer system. It takes about 10 years to embed into all those legacy systems.
Then they are counting on the big buyer to force the smaller business sellers to use the payments through the bigger company. The incentive for the big company, as you touched previously, is very low. They don’t need to get paid now because all of them are profitable.