Forbes FinTech 50 Leader Aztec Exchange files for Liquidation

PayMe has filed for Liquidation

Aztec Exchange, based in Ireland, wanted to be the invoice finance company for the Spanish speaking world, spreading itself into Spain and Latin America and doing deals with various network providers such as Invoiceware (now Sovos) and GoSocket. They even announced a deal in June to work with Canadian EDI provider EDI Gateway and offer their early e-invoice payment service PayMe (payme.cloud) to EDI Canadian supplier and corporate clients.

The liquidation was filed less than a year after it was picked for a Forbes list of the most promising firms in the sector.

But why did this happen?

Well, I don’t know, but I suspect it takes one or two bad deals or bad credits to pull a small firm down. Fraud should definitely scare investors buying receivables, especially when books can be cooked.

This should come as a warning to many out there that think applying technology and machine learning and the latest AI buzz words to get startup capital is going to lead to a sustainable business. Because that is what you want to build, something sustainable.

There is real risk out there, and companies relying on buyer approved invoices cannot assume that eliminates risk. It does not. Unless the buyer signs an irrevocable undertaking to pay that invoice, things such as disputes, warranty claims, supplier bankruptcy, etc. can happen.

The concern this gives in the market is that companies that started to rely on this type of financing now see these solutions as potential high risk. I mean if I was a company, would I prefer having a fixed rate Asset Based lending facility, or rely on some investors I don’t know and platforms which I don’t know the management or the true risks?

Believe me, the next recession will not be kind to those that have not buttoned down their solutions.  There are a number of big pitfalls that could be encountered and as one of my lender friends say, many of these pitfalls are not intuitive, so they will need to learn through bad debt. Or liquidation.

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Voices (2)

  1. Barry:

    Dead right Glen… all I would say is to start a new butchers shop you need to know how to prepare and sell meat.

  2. Glenn Blackman:

    The skill of a good invoice financier is in placing a value on the receivables and mitigating the risk of non collection in their funding formula. I feel the real risk is to the investors that put money into these type of funding platforms, rather than the users (who draw the funds – ok they lose their funder but there are many more out there that will happily take over). There are many well established, independent invoice finance companies that are backed by large well known concerns and can provide alternative finance against receivables.

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