Basware and Arrowgrass Announce Virtaus, a New Supply Chain Finance Solution


E-invoicing and purchase-to-pay solution provider Basware and European-focused alternative asset manager Arrowgrass Capital Partners LLP have teamed up to introduce a new company: Virtaus, which Spend Matters UK has called “a significant new supply chain finance product.”

In Basware and Arrowgrass’ words: “Virtaus enables any B2B network such as the Basware Commerce Network to offer innovative new financing services. Basware Advance — the first innovation of Virtaus — is a new, powerful online solution that allows small and medium enterprises to receive early payment for invoices and to gain better control and management of their cash flow.”

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Virtaus will manage Basware Advance, which can help organizations gain visibility into the payment process, offering better control over cash flow. Basware CEO Esa Tihilä said in the press release that with real-time and flexible financing alternatives, suppliers and buyers will benefit from being able to optimize cash and working capital, possibly leading to further investment and growth.

“Virtaus, the financing engine and joint venture between Basware and Arrowgrass, has been created to offer financing across the open Basware Commerce Network, connecting over 1 million organizations globally today, offering a fresh, easy and online alternative to traditional lending options,” Esa said.

Peter Smith, chief research officer and managing director of Spend Matters UK/Europe, expanded on the news:

“But the key point is that this is not dependent on any agreement from the buyer or indeed even on the invoice being approved at the point of financing. That differentiates Advance from most SCF offerings. Basware (and Arrowgrass presumably) are taking the risk that the invoice may not be authorised or paid — presumably the supplier would then have to be chased to recover the money! But in the usual situation, when the buyer pays (after 30, 60 days or whenever), that money flows back to Basware; so again, there is some risk there if the buyer does not pay to terms.”

You can also check out Peter’s coverage of this announcement: Basware Advance – an Innovative New Supply Chain Finance Product. Stay tuned for more in-depth analysis on this new offering. Peter and Jason each had the chance to speak with Esa in the past week and will be providing more insight from their chats.

We also encourage you to read our coverage on the partnership between Basware and Arrowgrass on Trade Financing Matters. David Gustin, an expert when it comes to alternative financing models in B2B, explains what to pay attention to in this partnership and why it matters for the market.

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