UK FinTech Stenn offers SME invoice financing

UK-based FinTech Stenn, which specializes in invoice finance, focuses its efforts on small and medium-sized enterprises (SMEs) and emerging markets, where access to trade finance has often been limited.

Trade finance is particularly critical for exporting companies, who often wait months for payment due to slow international trade.

“We realized that a lot of goods are bought from emerging markets, like China, India and Latin America, so we started meeting with suppliers in those countries and we saw how dramatically they were underbanked,” co-founder and CEO Greg Karpovsky said in an interview with the Financial Times.

Stenn has the ability to fund deals worth up to $10 million, a higher reach than that offered by other FinTechs in the invoice finance space and puts it in the same league as banks, per the FT.

In addition to increasing access in emerging markets, Stenn is also looking to beat existing invoice financing solutions in terms of approval speed. The startup promises to approve electronic loan applications in just 48 hours. Stenn uses a data-centric approach to assessing credit, fraud and compliance risks, and Karpovsky said the firm is a technology company with computer engineers making up over half of its employees.

According to the company’s website, Stenn has to date issued over $10 billion (USD) in funding to SMEs in 74 countries since its launch in 2016. Capital is provided by a number of banks and institutional fund managers, including HSBC and Barclays.

David Brear, managing director of FinTech consultancy 11:FS, told the FT that in the current economic climate, growing SMEs will be “queuing up” for invoice finance services given the pressure on their cash flow.

Brear called the pressures facing small and medium-sized businesses “scary,” “I can only see Stenn cleaning up that area.” So if it has a big enough book from a lending perspective, this is pretty low risk when it comes to invoice financing. It’s a bit of a blue ocean for them given the lack of competition on this scale.”

Another startup that has turned its attention to the SME trade finance gap in emerging markets is Nigerian company Breeze, which recently partnered with UK supply chain finance company Finverity to accelerate its growth.

Also read: Supply Chain FinTech Breeze teams with Finverity on African SME Capital

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