One of the biggest trends in FinTech is digitizing and speeding up the credit application and approval process. Another trend is using proprietary data to bring new financing options to cater to different segments of borrowers. Alex discusses a very interesting niche context within which he’s building a wonderful FinTech company.
Sramana Mitra: Let’s start by introducing our audience to yourself as well as to Nectarine Credit.
Alex Armitage: I’m the CEO and Founder of a fintech startup called Nectarine Credit. Nectarine Credit is a credit application management software system. In the not too recent past, most manufacturers and distributors were emailing, faxing, and sending PDFs back and forth for business credit applications to complete a very simple task of approving or denying commercial credit terms.
Because the system had been used for decades through snail mail and fax, and more recently over email, people have been used to doing it in this archaic way. We created a digital solution to expedite this whole process. The credit decision process begins with a credit application when a buyer of goods goes to a seller and says, “I want to buy 10,000 widgets.”
The first question is, “Can you fill out a credit application?” We have started with a platform that digitizes the entire process. We’re moving and expanding from there. We’re connected to more than 10,000 banks for bank account verification, bank balance checks, and cash flow reports.
Sramana Mitra: Let me understand the segmentation of where you are positioning your product. Is it in the manufacturing sector mainly?
Alex Armitage: It’s not just manufacturing, but it is a key focus area. It’s mostly physical products. You have distributors, manufacturers, contract manufacturers.
Sramana Mitra: Anybody who takes orders for physical orders from other businesses and needs to validate credit of the customer, that’s where you’re positioning yourself.
Alex Armitage: Correct.
Sramana Mitra: How long have you been doing this?
Alex Armitage: About a year now. We had some beta customers that helped us launch basically.
Sramana Mitra: But you already have over $5 million in revenue.
Alex Armitage: Correct. We had a lot of beta customers from other industries. We recognized this problem and built the platform for a couple of dozen customers who already needed this system in place. They signed up in advance. The beautiful element to our business is that there’s an amazing network effect. We’ve got one credit provider that is a seller of goods ask each credit seeker from many different references. Those references are our prospects.
People are coming on board our platform because they’re being asked by their customers to come on. For every credit provider we have, we have four to six new vendors under each credit seeker. What that means is one credit provider might bring on a hundred customers a month, and then each of those customers will have four to six references. That means you’ve got 400 to 600 prospects. As we add more, there’s exponential growth.