Afternoon Coffee: U.S.-China deal advances; Brexit win; Qwil completes double financing round; Bill.com goes public

Two sagas concerning world trade — Brexit and a U.S.-China trade deal — saw major developments that give clarity to months of uncertainty.

The UK election yesterday strengthened Prime Minister Boris Johnson, who for years has favored a UK exit from the European Union. Brexit could begin next month.

In the U.S. amid impeachment proceedings over President Donald Trump, he said Friday that a preliminary deal on the 19-month-long U.S.-China trade dispute has been reached, according to several news reports. The development could avert even more tariffs being imposed on goods from China that were to begin Sunday.

Gig economy advanced-payment provider gets more cash

Qwil, a San Francisco-based startup that provides financing to freelancers and small businesses, has raised $24.4 million in equity and $200 million in debt funding, Reuters has reported. The company, founded in 2015, will “use the cash injection to grow the business by making new hires and increasing the pipeline of individuals and small businesses it lends to,” Reuters said.

Spend Matters began covering the company in 2016, and Qwil was recently highlighted in our “Sourcing and Engaging the Independent/Freelance Workforce — An Emerging Ecosystem? (Part 4)”:

Historically, independent contract workers (ICWs) and microbusinesses have not had easy access to various types of credit/financing. That is still largely the case, but it may be slowly changing as unmet market needs are becoming more visible and fintech makes new models possible that can cater to ICWs, etc. One example of this is an ICW early payment service created and offered by Qwil. Qwil sells its solution through various types of businesses that are involved in the engagement of independent workers (i.e., online marketplaces as well consulting firms, marketing agencies, staffing firms, human capital software providers, et al). But it provides its end-service to ICWs and micro-businesses as a payment management point and a source of payment advances.

Qwil’s lean, low-cost model does not use traditional credit scores to make its underwriting decision. In addition, Qwil customers are charged a flat fee for the advance pay which equates to a 20% rate on an annualized basis, and payments can be sent to 140 countries in all major currencies. Qwil has reported that it “has advanced more than $150 million in pay through its platform so far, with nearly half of the customers using its services consistently after their first transaction.”

To read more on this general subject, see our article “Freelancers and Fintech — Follow the Money.”

AP automation heating up

On its first day of trading Thursday, AP automation company and payment provider Bill.com soared 61% after pricing its IPO at $22 a share, higher than the $16 to $18 a share range the Palo Alto, Calif.-based fintech had been targeting, Forbes reports.

Bill.com sold 9.82 million shares, raising $216 million and giving it a valuation of about $1.6 billion, Forbes said.

Bill.com helps automate payments for smaller businesses.

"The Bill.com IPO is yet another sign that CFOs have recognized that automating AP is essential for driving efficiency and scalability within their finance organizations,” said Chet Amit, the CEO of Tipalti, a mid-market AP automation and payments provider. “We expect to see a snowball effect as the AP automation space collectively gains momentum and matures, and other companies in the space look to go public."

Spend Matters plans to add AP automation providers to its SolutionMap analysis next year.

Rail carload and intermodal volumes down

U.S. rail carload and intermodal volumes saw annual declines, for the week ending December 7, according to the Association of American Railroads (AAR) figures, as reported by the Supply Chain Management Review. Rail carloads, at 248,174, were down 7.2% annually, topping the week ending November 30, at 215,126, which was likely impacted by the timing of the Thanksgiving holiday, and trailing the week ending November 23, at 251,901.

Phishing attack targets government procurement

A report by cybersecurity firm Anomali has identified several phishing sites set up to steal credentials from at least 22 government procurement agencies. The report, "Phishing Campaign Targets Login Credentials of Multiple U.S., International Government Procurement Services", says the organizations targeted in the U.S. included the U.S. Department of Energy, U.S. Department of Commerce, and the U.S. Department of Veterans Affairs.

Shutdown of ethanol plants pose difficulties for U.S. corn farmers

Since November 2018, at least 13 ethanol plants have shut down in the U.S., increasing the troubles of America’s corn farmers, adding to the difficulty they already face because of other issues like poor weather and the U.S. trade war with China, Reuters reports.

The plants that have closed represent about 4.4% of the nation’s capacity. Several other ethanol plants temporarily reduced production during that time.

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