Facevalue, a Netherlands-based factoring platform, has launched services across Europe for SMEs.
Facevalue is a Dutch Fintech startup that offers working capital solutions and specializes in global accounts receivable and payable finance. Prior to the launch of its SME solution, Face value has been serving the corporate mid-market in collaboration with global transaction banks.
Facevalue states that many factoring solutions for SMEs require that the business sell all their outstanding accounts receivables to the financier for a fixed period, usually two years that includes high fixed costs. Facevalue offers greater flexibility and does not charge fixed fees.
Neels Bornman, Chief Executive of Facevalue, says the banking landscape has changed and it has become a challenge for many businesses to access credit.
“There is often no one to receive their application, let alone understand the dynamics in their business, and by the time the application is assessed, it is already dated. Facevalue has built a secure online platform that extracts invoice data, handle the mapping and conversion of data formats and lists all our clients’ outstanding accounts receivables in a ledger from where they can configure rules, or choose manually which receivables they would like to sell immediately and without recourse.”
Facevalue explains that it performs a role as a trusted market platform between businesses and investors. Citing industry organization FCI, Facevalue states that accounts receivable finance has grown at an annual compounded growth rate of 7% over the last twenty years from €600 billion at the turn of the millennium to €2.7 trillion today. The market declined 7% worldwide during the pandemic, but the Netherlands still managed to grow by 1.4%. Europe accounts for 68% of worldwide accounts receivable finance dominated by France, Germany, UK, Italy, and Spain that account for 70% of the European market. Facevalue expects the market to grow dramatically and says it has built a platform to scale.
“We believe that businesses’ top priority will remain the protection of their available liquid resources. Adopting a flexible finance solution as part of a recovery and growth plan should be part of every business’ strategy during these uncertain times,” says Bornman. “Our research of European cross-sector mid-market corporates show that even before the pandemic, revenue was up year on year but even then, companies struggled to convert revenue to cash. In addition, capital expenditure as a percentage of revenue has continued to decline, which implies that companies are managing cash by not making capital investments. During the pandemic, revenue declined and is now only starting to recover. We predict that capital expense will remain a low priority while cash flow management becomes the number one priority.”
Facevalue has raised €9 million in equity funding to date and is supported by institutional bank and non-bank investors that finance the accounts receivables and payables it purchases.