Finverity - New Invoice Finance Platform with CEE Exposure

Dear Investors,

We are Finverity, the “new kid” on the block when it comes to invoice finance and P2x. Our platform is currently undergoing a closed pilot and we plan to open to the world in Q2 2019. We wanted to introduce ourselves to you and hopefully get to know some of you as well!

The Founders are originally from Romania and Russia respectively having lived in the UK for the past 10 years, having backgrounds in Investment Banking and Development of Digital Strategies for Banks. As you can probably imagine, the latter was rather frustrating as banks are not exactly nimble. After having witnessed the lack of maturity in Eastern European credit markets and the inefficiencies of the banking system when dealing with SMEs, they set out to create a simple, scalable and effective solution to allow the backbone of the economy access Supply Chain Finance.


Finverity is a cross-border invoice trading platform connecting investors from developed markets with high yielding opportunities in developing markets. We offer liquidity to SMEs against the invoices they issue to large domestic and international companies (Invoice Payers) that buy their goods/ services. In our model, the only risk exposure is the credit risk of the Invoice Payer, as all invoices are validated, confirming that they are genuine and come with goods acceptance and with the payer’s legal obligation to pay Finverity directly for the claim. However, the cost incurred by the seller is that of their own perceived risk, thus absorbing a wider credit spread and offering returns above what the traditional market would be able to offer for the respective level of risk.

Our platform focuses solely on Eastern European markets, with our first target being Romania where the base interest rate is 3%, and the national currency is RON. Romania is part of the European Union and has one of the most advanced levels of digitalisation for payment delay tracking between companies through a publicly available database called CIP, company information and financials through ListaFirme.Ro and a Unique Invoice Numbering system. We believe this positions Romania as an ideal market for Invoice Finance activities especially given the high annual growth of the Factoring Industry in the market.


Finverity has spent a year developing and iterating our platform and process with 2 goals in mind:

1. Minimise Risk – The global default rates in supply chain finance are 0.5% to 1.5%. However, the main reason people lose money is Fraud. To mitigate that we incorporate a Payer, usually an enterprise level corporate, onto the platform. This allows us to ensure that every single invoice is validated directly by the Payer post goods/services acceptance. The Payer has a contractual relationship with Finverity obligating them to pay any invoice we finance directly to Finverity’s bank account, removing the counter-party risk of the SME selling the invoice. Thus, investors are only exposed to the credit risk of a corporate balance sheet that has passed the credit assessment process. The analytics on these companies are available for review on the platform. 
   
2. Make it “Nigel” friendly – Our favourite investor, Nigel, is one of the most incredible humans on Earth. He is, however, not very technologically savvy. Thus, Nigel tests every single part of our platform in order to make sure it is intuitive and clear and there are no surprises. The no. 1 reason why Supply Chain Finance programs have failed in the past is that the Suppliers have found it too difficult to gain access to or use the facility.

We are currently in the Pilot process where we have 3 Corporates in Romania as Invoice Payers who are extending our services to their network of suppliers. Thus, when a supplier requests an early payment, the invoice becomes available for Funding on the Finverity platform where investors can fund it. Below are some key metrics of our product: