Sramana Mitra: It’s not a big buyer whose problem you’re solving. You’re solving the small business’ problem of cash flow. A small business working with a large buyer with not very favorable terms puts the small business at the mercy of the buyer.
In this case, just inserting Fundbox or equivalent speeds up the working capital issue for small businesses, and the large buyer has absolutely nothing to lose by introducing that.
Eyal Shinar: The buyer has a lot to lose because the buyer is getting 10 of those every week. They already have systems in place. Just to switch from one accounting software to another takes a huge toll on the business. When you have a big company and you have all the legacy business in place, you need seamless integration.
Sramana Mitra: I’m not disputing the fact that it’s complex for a company like Fundbox to make this happen. I’m thinking more from a problem domain point of view. That problem is the one that is going to help small businesses the most.
Eyal Shinar: I agree. In a perfect world, the small business seller should get paid instantly. That’s our motto, “Don’t wait to get paid.” The reality is large companies buying from smaller companies can dictate terms.
What we are offering those businesses, instead of forcing Apple to integrate Fundbox Pay, we have full integration into all those accounting software. From the dashboard of the receivable management, they can click directly on the invoice, and you get paid that amount instantly from Fundbox.
This is a two-party transaction. When you get paid, you’re going to pay us back with interest. It doesn’t make a business case to go to Apple and convince them to use something like Fundbox as a buyer. What we offer to the small business owner is the next best thing, which is getting the money on this outstanding invoice; but once you get paid, you need to pay us back.
This is where your first question becomes relevant. How do you use the data to underwrite that risk? The underwriting that we’re doing there is basically connecting to all of the data sources that I described earlier.
Sramana Mitra: When you are underwriting a loan or an invoice, you don’t really need that large company to approve this.
Eyal Shinar: Correct.
Sramana Mitra: The large company doesn’t need to integrate.
Eyal Shinar: Correct. We integrate into the platform that the large companies are already using. We have integration to all the accounting platforms, ERP systems, and CRM systems.
Sramana Mitra: I don’t think that any of those are necessary. If I strip down to where your workflow is happening, it’s purely under the system of the small business and their creditworthiness. You’re assessing the buyer whose invoice you are paying in advance. As long as it’s a purchase order from Apple, you don’t need any integration from Apple.
Let’s say this invoice from Apple is in the Quickbooks system of your customer. You know it’s Apple. You can give them credit and you can basically pay their invoice. Apple doesn’t need to do anything else.
Eyal Shinar: That’s exactly right and that’s exactly what we’re doing. We’re bringing the credit, in this case, to the point of financial trigger.