C2FO teams with Fifth Third Bank

MP-market-auctionC2FO, formerly known as Pollenware, got its first bank coup when it announced a licensing agreement to  collaborate with the Fifth Third Bank team to offer a unique working capital solution to Fifth Third clients.

Pollenware was founded in 2008 and is based in suburban Kansas City. The company enables Corporates to conduct a web-based marketplace where companies and their suppliers conduct live auctions aimed at optimizing the cash flow process.  C2FO has been described as a private NASDAQ for cash flow between buyers and their suppliers.

What makes C2FO unique to other vendors operating in this space is the following:

  • Buyers designate pools of cash for early payment and suppliers bid discretely, each according to their own need for a share of that cash by offering various and unique discounts
  • Supplier initiates discounts, making this a more positive approach to early payment discounts.

Where they are challenged is they lack invoice capture functionality, which may inhibit getting invoices into the system quickly to auction them off.

I spoke to several Corporate users who like the model because it is bank agnostic and they do not need to involve their banking group. Corporates have the flexibility to dial the weekly auction up or down based on their cash position.

It will be interesting to see how other banks react to this announcement.  Sandy Kemper, C2FO founder and CEO, is a former banker himself, as an ex-CEO of UMB Bank.  His play is to disintermediate the banks (or at least join forces with them and capture their relationships).  The critical question is this a neat product or is this really a business that can be built.  The banks cannot surrender this territory, as it threatens core working capital lending.

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