Category Archives: Trade Financing

New Downloadable Paper from Trade Financing Matters

- July 28, 2014 6:20 AM | Categories: Learning / Research, Trade Financing

"C2FO’s Marketplace Model Attracting Attention" is a new paper from David Gustin (managing editor, Trade Financing Matters). In it he outlines the strengths, weaknesses, and ultimate upside of the C2FO early payment model. Here’s an excerpt: “C2FO is an online, early payment system that hosts a daily market, where suppliers make dynamic bids for accelerated payment of their approved invoices by discounting those invoices in real-time events. C2FO has been described as a private NASDAQ for cash flow between buyers and their suppliers.”

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Taulia Raises $27 Million, Valuing Company at 15X Trailing Revenue (Roughly)

We continue to be surprised at some of the funding rounds and public company valuations in the sectors of procurement and trade financing (receivables and payables financing). However, Taulia is one of the few vendors that I’d bet my own money on to grow into what is a curiously high valuation based on historical – even historical tech – norms. It’s my estimate that the recent Taulia valuation round was done on a valuation multiple roughly around 15 times trailing top line numbers. I base this multiple on a napkin sketch of Taulia’s current accounts and business activities (including program adoption) and a WSJ blog pegging the overall valuation at $200 million.

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Download This Paper on the Differences Between Dynamic Discounting and SCF Programs

- July 23, 2014 6:42 AM | Categories: Learning / Research, Trade Financing

Available over at our sister site Trade Financing Matters is a new downloadable paper from David Gustin (managing director). “Mixing Apples and Oranges: 8 Differences Between Dynamic Discounting and Supply Chain Finance Programs” delves into supply chain finance programs and innovative discounting can benefit these programs even further.

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Demica’s Three Core Supply Chain Finance Solutions

Demica is owned by J.M. Huber, a diversified multi-billion dollar family-owned company headquartered in the U.S. with operations and staff located globally. I had to ask what a company of this size is doing owning a vendor in the supply chain finance market. After all, J.M. Huber is a diversified multi-national company dealing with engineered materials and natural resources. Huber established a financial services division in 1997 and started working with Demica in 2001. In 2002, they acquired the platform. But just what does Demica do? Their three core products are focused on supporting supply chain finance, invoice discounting, and trade receivables securitization.

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Physical and Financial Supply Chain Convergence: It’s Real But Harder Than It Looks

- July 16, 2014 10:32 AM | Categories: Innovation, Supply Chain Management, Trade Financing

My Trade Financing Matters colleague David Gustin has been talking quite a bit about the convergence of financial and physical supply chains. But there’s both hype and reality, as he points out in a post titled "The Hype of Physical and Financial Supply Chain Convergence." Still, the value of business networks that operate between companies in such scenarios is indisputable. And they’re becoming even more so as supply chains operate in a globalized context.

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For Investors, ICC’s 2014 Trade Register Report Lacks Credibility

- July 1, 2014 4:20 PM | Categories: Trade Financing

I know I won’t be popular with this post, but I never choose the popularity route. To me, I’ll take quality over quantity any day. And so I have to point out that I think the 2014 International Chamber of Commerce (ICC) Trade Register Report has a ways to go. The report concluded trade transactions for all intent and purposes have practically zero losses. That’s right -- zero losses. The problem is that the people who matter don’t believe it. Who matters? Well, investors matter. And if investors don’t find your data credible just because the banks say so, then they will buy something else.

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E-Invoicing and Trade Financing Intersections – Courtesy of Billentis

E-invoicing is just a piece of the bigger trade financing puzzle (a market that is still largely un-intermediated with debits and credits sitting on the balance sheets of those companies engaged in trade). Beyond e-invoicing, it’s critical to explore the intersections with broader purchase-to-pay (P2P), direct materials procurement, services procurement, and related systems – not to mention understanding all of the related capabilities and requirements of supplier on-boarding (e.g., know your customer – KYC) and management.

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Tungsten’s Completed Acquisition of FIBI Bank Makes the Front Page of the FT

- June 18, 2014 2:22 AM | Categories: Industry News, M&A, Trade Financing

_DSC3068 Tungsten made the headlines – the front page in fact – of the Financial Times’ Companies and Markets section: “Tungsten Bank sets its sights on providing small business finance.” The FT covered the news that Tungsten had completed its planned acquisition of FIBI Bank, which will now be renamed Tungsten Bank. The FT writes that “the move means Tungsten will not only be able to process billions in suppliers’ invoices for large companies such as General Electric, but also advance cash to suppliers that need money immediately … [through] a cheap form of funding in the form of bank deposits.”

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So You Need a Supply Chain Finance Platform — What You Need to Know

- June 17, 2014 3:33 PM | Categories: Supply Chain, Trade Financing

Supply chain finance is a very broad category as some define it. But we look at it as something very specific, typically centered on a solution that enables suppliers/ vendors to sell their invoices “approved” for payment by their buyer before the payment due date. Still, hold that thought for a moment and consider the broader landscape – as well as how these tools must interact with a technology ecosystem that already exists. Looked at from this perspective, purchase-to-pay (P2P) technologies to support early payment functionality for your suppliers can come from several different sources.

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The State of Supply Chain Finance Programs: Seven Quick Facts

- June 2, 2014 4:48 PM | Categories: Supplier Management, Trade Financing

I recently had a few discussions with corporates who have rolled out Supply Chain Finance (or Approved Trade Payable) programs with their supplier base. These corporates have been running programs for several years so I thought it would be good to get some feedback on how the programs are progressing. Here are seven quick facts that seem to be consistent with programs.

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Banks and Supply Chain Finance Technology Deployment

- May 27, 2014 4:36 PM | Categories: Supply Chain, Trade Financing

Many banks are trying to figure out how to provide supply chain finance capabilities to their clients and what technologies they need to support their infrastructure. Trade is now becoming just another specialized lending product at banks, and leading banks are trying to figure out how to integrate trade finance with their factoring, commercial finance, asset based lending, invoice discounting and other bank lending areas.

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Why Procurement, Treasury, and Finance Need to Be a Team (Especially Today)

The old way of doing things, with procurement, treasury, and finance acting in silos, no longer makes sense. This post gives some of the basics of why procurement needs to start paying attention to supply chain finance, but if you want deep analysis, join me tomorrow from 12-1 pm Central on a webinar called Supply Chain Finance: Where Are Leading Corporates Going? But first, the basics.

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