Revving, a United Kingdom-based invoice factoring firm, announced this week a £107 million investment led by asset manager DWS. The package includes £100 million of debt funding, which will be invested directly into the UK Adtech sector and wider digital economy. Revving said that the sector is vital for the future growth of the UK economy but has been largely neglected by traditional financial institutions.
Over the next three years, Revving expects to fund up to £1.8 billion to UK digital businesses. According to the IAB, the industry body for digital advertising, this capital injection could have a 4.8x multiplier effect, generating a potential £8.6 billion boost to the UK economy.
“Over 50,000 UK businesses went under last year due to late payments. We are on a mission to eradicate this, and this strategic investment is a game-changer for Revving and the entire digital economy,” said Chris Pettit, CEO of Revving. “Revving has built a highly sophisticated platform specifically for the digital economy that completely reinvents the way traditional invoice factoring works.”
The UK is betting big on the digital economy as a key driver of future growth, and the adtech sector, which Revving said contributes £129 billion to the UK economy and supports more than two million jobs, is critical to this.
Despite its potential, UK adtech faces significant challenges with extended payment terms that often stretch to 120 days or more. Revving said this is not only stifling growth and innovation but makes the United Kingdom less competitive against well-capitalized US adtech businesses who are taking an increasing share of the global market.
The Complexity of the Adtech Ecosystem
The complexity of the Adtech ecosystem, including slow payments between publishers, affiliates, advertising networks, agencies and other intermediaries, results in a domino effect of financial strain across the entire digital supply chain. Publishers face delayed payments, ad networks, in turn, struggle to accelerate cash flow for their clients, and programmatic and affiliate businesses are starved of critical cashflow and unable to capitalise on growth opportunities.
SME affiliates are suffering a David and Goliath moment with large platforms shortening supplier payment terms on the one hand, whilst large brands demand even longer invoicing payment terms on the other, leaving publishers and other digital SMEs invariably caught in the middle and having to fund these costs from their pocket.
“UK affiliate marketing faces a funding bottleneck, with access to growth capital at an all-time low,” said Kevin Edwards, founder and director of APMA. “The industry represents the best of UK entrepreneurship, and this cannot be jeopardized by sluggish payment systems. Revving is leading the way in enabling faster access to affiliate commissions, allowing affiliates to reinvest for growth.”
“Revving’s focus on high-tech digital ecosystems and robust growth trajectory aligns perfectly with our commitment to backing transformative financial solutions in the UK,” added DWS head of capital solutions Vlado Spasov. “This investment represents the evolution of private credit as it grows into new and innovative digital sectors.”
Revving’s portal unifies sales, payments and funding information from multiple sources to provide customers with transparency and control over their cashflows, expanding the reach of their solutions and streamlining financial operations.
Key features include:
Funding model: Revving has developed a new and innovative form of invoice factoring specifically for the digital sector. This funding model shifts credit risk upstream and allows customers to access greater levels of highly flexible funding;
Tech-driven automated process: Using a proprietary technology platform and credit risk engine with direct integrations into digital marketplaces, Revving leverages granular data to provide an automated funding solution ahead of invoice creation, allowing instant access to sales revenue, improving cash flow and reinvestment opportunities, and;
Payment and credit insights: Revving provides valuable data and insights into supplier credit, payment risk and payment performance, improving market transparency and enabling better financial planning and risk management.