This interview talks about the FinTech trends in invoice factoring.
Sramana Mitra: Let’s start by introducing our audience to yourself as well as FundThrough.
Steven Uster: I’m the Co-Founder and CEO of FundThrough. We are an invoice funding platform that bridges cash flow gaps for small businesses that invoice large customers and have to wait 30 to 90 days for those customers to pay them.
Sramana Mitra: How long have you been around? At what scale are you seeing adoption?
Steven Uster: We launched in 2014 and are originally based out of Toronto, Canada. We now operate across North America. We have 50 employees located across both the US and Canada. We’ve funded 50,000 invoices to date. We are funded by some of the large Canadian venture capital firms and angels.
Sramana Mitra: Let’s double-click down on segments where you’re seeing adoption. What kind of invoices or businesses are you finding the adoption in?
Steven Uster: There are macro-trends. Primarily, Fortune-500 type companies take longer to pay their invoices. Our core niche verticals are small businesses that are selling to those types of companies.
We have a partnership in the Oil & Gas space with a company called OpenInvoice in the US and Workbench in Canada where if you’re a supplier to the large companies in the Oil & Gas space, you’re going to invoice through these platforms.
We have a button right in there. As soon as you invoice, you don’t have to wait. You just push that button. We also have a strong channel through the QuickBooks app store. If you’re a small business owner that uses QuickBooks Online as your accounting and invoicing software, you can come straight to us and we can fund you quickly that way by sharing data.
Sramana Mitra: If you could stay on the QuickBooks Online partnership for a moment, what is your criteria? I imagine you don’t offer this to all small businesses that are using QuickBooks Online. What are the criteria?
Steven Uster: The primary criteria is who are you selling to. We are not the solution for selling to other small businesses or selling to consumers. Criterion number one is, are you selling to businesses that are larger than you?
If the answer to that is yes and you sell to them in a way where you invoice them and you have to wait for payment, those two primary criteria would enable you to use FundThrough.
Secondary criterion is, are your taxes up-to-date or is your payroll up-to-date? We don’t look at personal credit scores. We focus more on the strength of who you sell to and the knowledge that the invoice you’ve issued is for goods or services that have been completed.
All you’re doing now is waiting to get paid, and you don’t want to wait because you have growth opportunities to deploy that capital. We will wait on your behalf.
Sramana Mitra: Besides these two partnerships that you’ve talked about, are there other major channels that are producing for you?
Steven Uster: We have several other channels through the accountants where we find that accountants understand the perils of not having enough cash flow as a small business. Those are nice referral sources for us.
We have also found ourselves doing quite well in the channel of selling to retailers. If you’re a wholesaler or a manufacturer, we can have you set up on our platform based on the portals that you’re using or based on the customers that you’re selling to.
This segment is part 1 in the series : Thought Leaders in Financial Technology: FundThrough CEO Steven Uster