Revolutionising invoice trading for SMEs

September 6, 2023

A journey from a finance professional to a tech founder, highlighting the critical role of patience, problem-solving, and insights into the innovative platform that bridges SMEs and investors.

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Revolutionising invoice trading for SMEs

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In this episode, Ana M. Olmos López the founder of Inversa, shares the story behind Inversa and how they saw a need for SMEs to have access to short-term financing and for small investors to have more investment options. Inversa is a company that offers invoice trading and liquidity for SMEs and investors. Anna discusses how they created a platform to connect SMEs and investors, turning their funny idea into a functional and technological reality. Tune in to hear all about Anna's journey as a founder and the impact Inversa is making in the finance industry.

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The key moments in this podcast are:

00:01:26 SMEs and small investors.

00:05:23 Solving SMEs' real problem.

00:09:23 Creating healthy competition.

00:15:24 Favourite tech product.

00:19:03 A marketplace and hard work.

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Read the transcript

00:00 Charles Brecque Welcome to the Tech Story Podcast, a place where we interview interesting founders and people in tech. Today, I'm very excited to welcome Anna from Inversa. Anna is a founder based in Spain and Inversa is a company that offers invoice trading and liquidity for SMEs

00:20 Ana Olmos and investors. Thank you very much, Anna, for taking the time. Thank you for having me here, Charles. I'm very excited. It's my first podcast.

00:28 Charles Brecque Yeah, well, I'm sure you're going to do great. So maybe can you start with sharing a bit of background, the story behind the company and where you are today?

00:36 Ana Olmos We are three founding partners. All three of us come from a finance background. We worked at different financial institutions before starting Inversa. So it's a funny story because although we didn't work together, we would see each other at different events. And during the coffee break of one of those events, we were talking and we had like the same reception back then. It was like SMEs are credit stopped by banks not having enough access to short-term financing to cover cash flow needs. And at the same time, there was an increasing number of retail clients that were more and more disenchanted with the investment products that banks offer. If you are a small investor or like anyone that has savings, you usually don't have much options where to invest. And we all agree that they would be a perfect match if both groups knew about each other, SMEs and these small investors. And we had this funny idea, let's make a team now for SMEs and investors, a meeting place where they can get to know each other and let love arise naturally. It was a joke back then,

01:54 Charles Brecque but we kept talking about it. And in some way, we managed to grow this idea and shape it into the functional and technological platform Inversa today. That's great. And so in terms of what the platform does, it's like a marketplace for investors to invest in. What are they investing in? Is it the SME? An invoice?

02:20 Ana Olmos It's factory. It's commonly known as factoring. Banks do factoring as well, but often they do not offer factory solutions to SMEs. And when we talk about SMEs, SMEs can be a small company that has annual revenues of 300,000 euros a year, or even a company with 20 million annual revenues. It's such a big group. So very small SMEs do not have access to this kind of financial solutions. Understood. And what is factoring for people who don't know? What is it? Factoring is basically for all companies that sell to other companies, the B2B model, they usually have payment conditions. They have to go from 30 to 180 days. For a small company, this is a big problem. It can be very stressful because you still pay your salaries and the salaries of your employees or your rent. Well, you're old builds. You pay them on a monthly basis. So to wait until your client pays your service or the goods you delivered, it's difficult for SMEs or even for any company to keep that much cash flow to cover those needs. So a solution is to sell open invoices. And to sell an open invoice, you pay some fees and of course an interest rate for this financing, this in groups. Inversa determines the interest rate and the fees. What is the business model? The interest rates, the return an investor can get through invoice trading at our platform is fully for the investor. So Inversa only charges fees for the managing of the publications and the payment collection. So SMEs pay two kinds of fees. We have financing lines that are similar to credit lines and banking. And we have a study fee, which allows us to cover certain services that we need to validate the risk, like Dun & Bright Street in the UK or in Spain we use Informa, which is a database for financial information, which gives us or allows us to give our investors an independent credit opinion and a rating for every debtor. And that's basically what we do. We have a marketplace, we allow SMEs to publish their open invoices, to sell them on our marketplace. And we only determine how much risk can be

05:06 Charles Brecque published on our platform. We do not go to high risk operations. And we publish this third party opinion of Informa or Dun & Bright Street. That's great. And it seems like you're solving a real problem for SMEs. Yes, it's a real problem. Because in Europe, 99% of all companies are SMEs. It's like the lifeblood of the whole economy. And I saw on your website, and maybe the figures are out of date, but millions of euros have been sort of funded free of that.

05:44 Ana Olmos 18 million euros funded through Inversa. I think today. Congratulations. And so through this journey, what's been your favorite moment so far? There were a lot of moments. We reached 2 million within a few months after we started in March 2019. So this was a very, it was great for the team for Inversa as well. But for me, particularly, the best moment was when we invited a tech advisor on our team. So the founding partners, we all have finance background, we are very passionate about technology, but we needed someone that could help us to communicate with the developers and to understand where our technology can be better and grow this part. So yes, it was like August 2019. We found this person that was great for us because would you take first? Tech expert. But at the same time, he has a bachelor degree in business administration, so he can talk to us, he understands us,

07:03 Charles Brecque and can talk to the developers and give us some guidance within technology. I think everyone we were saying before, but speaking to his tech team is a challenge or an art. It's an art. You think they understand what you want this platform to do and how the process has to be, but in the end, the result sometimes differs a lot from what you thought you told them. And I think it's also being too technical isn't the solution either, because sometimes when you've got the business background, you can speak things into existence that maybe if you have the technical mindset, you might think, oh, that's not possible, so I'm not going to do it. So I think it's really important to have the good mix and congratulations on finding a tech advisor. Thank you. And through this journey then,

08:01 Ana Olmos what do you wish you had known before starting Inversa? We all come from a finance background, so we are used to do a lot of planning before starting this kind of adventure. But in the end, you need a lot of patience. Everything took longer than we thought it could take, especially development. And yes, maybe I would have been really grateful to know that sometimes things take longer than you expect. Yeah, I think everything takes longer, especially development. So everything else, well, we were on time in many previews of our roadmap. We have a very strict roadmap and we were on time in many things,

08:56 Charles Brecque but not in development. Development took us like four on longer than we thought. Yeah, I think at least what I found with development is you need to make the project as simple as possible. And then what has also helped with us is putting the team into smaller teams, so that there's almost like a competition between the teams. And then it means that if one team says that they will finish on a certain date, it means the other team will have to finish on that date. And it creates a good healthy competition. It's worked for us and it meant that yesterday we released a big, big release in the product. And I'd say it's maybe the first time ever that we've said we're going to release on this date and we released on this date. So I think creating healthy competition is

09:50 Ana Olmos quite positive. And Inversa was founded in 2019. We are on the Spanish market in March 2019. We started small because, and we didn't promote it too much because we started with the first version of our platform to test the response of both SMEs and investors. The response was good, but we needed to adapt to the needs, to the particular needs of investors, especially investors. They are assuming the risk, they are investing. So the money comes from there. The problem is the origin. The SME has the problem, but the problem solver is the investor. So we use this time to communicate actively with investors to see how to improve the platform, what they want on their accounts, what they want to see information, et cetera. So yes, it was a long journey, but right now we are very confident that we have a good product, a solid product, and that we want to scale it. What are the goals then for the next five years? How do you sort of see the business scaling? So we want to be a reference for invoice trading in Europe. Right now we are already operating in Spain and in Portugal with SMEs in both countries, but our investors are from all parts of Europe. It's really nice because we almost did nothing in marketing. Now we are starting to move a bit to strengthen our SEO and everything else. So within five years, what we want is to be at least be financing about a million euros per month. Then it will allow us to scale. The need is there. SMEs, we have a lot of SMEs that right now we need to turn down. Well, not turn down, but we need to ask them to wait a bit because our investor's community is not big enough. So yes, we want to scale it and we will start with investors. And of course, in the technological part, we are implementing artificial intelligence. We want to make our platform as connected as possible. All of the services or suppliers we need are completely integrated via API. And we want to make it even faster and automate further with artificial intelligence.

12:30 Charles Brecque So it's a challenge. It sounds really, really exciting. And one question that I have is, what happens if a client of a supplier doesn't pay the invoice? How does that impact Inversa

12:47 Ana Olmos or the investors? Well, on Inversa, we make a rigorous analysis of all debtors. And we were kind that the commercial relation between the debtor and our client is real and as on-situent invoice as well. But still there could be an invoice that won't be paid. So we follow three steps. We work with our client to reach a friendly agreement to settle the debt. So we need our client to help us because it's his commercial relation, of course. And second, most of the invoices that we published have a credit insurance. So we resort to credit insurance that covers between 85% to 95% of the invoice's amount. And if this doesn't work, we work with a specialised claims team to recover the debt by judicial or extrajudicial means. So investors

13:52 Charles Brecque don't need to worry about that. We are in charge of the payment collection. Perfect. Now it seems like then as an investor, your downsides is at the end of the day just what you'd get back from the insurance maybe, but not like 100%.

14:08 Ana Olmos Well, of course, there's always a risk associated. But we try to mitigate that risk. So the investor doesn't use everything to save. Yeah, they will use everything. They might need something, but that's also the nature of… In most cases, we recommend to diversify. Because you can invest something with 20 euros so you can diversify a lot between economic sectors, countries. We have debtors from different countries because we are very specialised in SMEs that export goods or services. So we were able even to finance invoices with debtors from Hong Kong. That's very far for us. And the payment collection is difficult in this situation. So we reached an agreement with Wacal, a payment institution dedicated exclusively to payment collection of invoices. So this allows us to have a good partner that can locally manage any issue with invoice. Yeah, that sounds great. And you're on the Tech Story podcast. So what is your favorite tech product? Oh, okay. You will call me Otsu because I'm still fascinated with smartphones. Every smartphone reaches or is even better than before. Right now, I'm saying this because I can get out of my house with only my phone and I have everything on my phone. Because even the keys of my house is everything because right now everything is

15:54 Charles Brecque connected in a smart way. I really, I suffer when I forget my phone. I'm outside and I can't charge it. Yeah, no, I think for the first time in a long time my phone died on me when I was cycling. And yeah, it was a nightmare. But no, I agree. It creates anxiety. Yes. Yeah. And you're based in Spain, now in London, you know, for the week. Do you sort of plan to bring the company to the UK? Or

16:30 Ana Olmos do you find that building a company in Spain is as good? No, of course not. Our goal is first Europe. Of course, we want to be the solution for European SMEs in invoice creating. And first for investors, I think, an investment, this kind of investment, we are probably the only platform in Europe that right now allows retail investors to invest in invoice trading. It's not a product that you have easy access to. And yes, we like the UK. We already have our trademark registered in the UK and our developer team is in London. So the UK is very important for us. This market that we like, that's most of our investors come from the UK right now. And maybe in the future, we will be based here as well.

17:24 Charles Brecque Do not just start it. Yeah, no, we moved from Oxford to London, and that was almost like changing countries quickly. The impact was really positive, but also really big in terms of opportunities. And so, yeah. And what one piece of advice would you give to a founder watching the podcast?

17:45 Ana Olmos Well, it might sound like a cliche or a stereotype, but they should never give up. There is no paleo. You can be wrong about something, but if you work towards a goal, you are always on time to change direction and reach the goal. I mean, we all have ideas, right? Most startups are based on just a single idea. There are many ways to reach and to really create what you have in mind. So they must never give up and never lose this curiosity to find new ways and new technologies. No, I think never giving up. In our case, we didn't create something new or something different. We just combined technology in the best way to solve a problem and to be very useful for investors and for SMBs who just want to make their lives easy. You just need to find a problem and then just solve it. It sounds simple, but it's actually a lot harder because you don't see what's behind everything. You only see, oh, okay, it's a marketplace. Well, it's a marketplace and there's a lot of work behind it. Exactly. Great. Well, thank you very much, Anna, for being on the podcast and best of luck growing in Inversa. Thank you for having me. Fine. Perfect.

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