Breaking: Tungsten/OB10 receives USD 200mln funding for -UK- supply chain finance

Today Tungsten (the organisation that acquired OB10 last year September) announced that Blackstone Tactical Opportunities has agreed a $200mln funding deal that will allow Tungsten to provide customers supply chain finance. Tungsten, valued at $225mln before this deal was made public, is aiming to acquire the UK arm of the First International Bank of Israel to create an invoice discounting business.

The deal shows that OB10, now a Tungsten company, is looking what lies well beyond e-invoicing: supply chain finance. Supply chain finance could very well be a huge trigger for e-invoicing adoption. But it also could trigger the demise of the role e-invoicing, making it a mere part of supply chain finance.

Economic recovery needs the fertiliser of working capital and supply chain efficiency

At least that is what Tungsten says: “Green shoots of economic recovery need the fertiliser of working capital as well as supply chain efficiency.” with the following arguments:

1
The British Chambers of Commerce’s New Year statement highlights rising confidence in the business community but identifies working capital as the biggest issue threatening growth.
2
Goldman Sachs identifies a “Lazarus-like transformation” in the UK, which started 2013 on the brink of a triple-dip recession, but ended it as one of the fastest growing economies in the developed world.
3
In the UK, lending has been decreasing by 3% per annum since the financial crisis. For SMEs, lending fell 10% over the two years to April 2013 and has fallen further since, despite signs of improvement in overall lending to the broader corporate world.
4
According to an IFF Research survey, more than a third of the 5 million SMEs in the UK need external capital to help grow their business this year, however, there is little evidence that initiatives such as Project Merlin, Funding for Lending and the Government’s new Business Bank are working, meaning other financial solutions have become critical for SMEs.
Some other data points mentioned by Tungsten:
1
Inexorable rise of invoice discounting as part of supply chain efficiency - evidence based growth worldwide of invoice discounting online.
2
Billentis data estimates potential savings from e-invoicing at 57% for issuers and 62% for recipients.
3
E-invoicing analytics help companies source their supplies more smartly and cheaply as well as gain competitive insight from big data.
4
Organisations are improving their understanding of customer habits and sales trends by analysing operational data.
5
E-invoicing paving the way for ‘real-time’ economy - cash management and trade receivables financing improved, including supply chain financing capability - suppliers can gain access to working capital outside of traditional factoring.
6
Clear and ‘in the moment’ financial reporting allows for better planning and management with beneficial effect to margins.
7
E-invoicing market expected to grow at 8-10% by 2015 (Spend Matters data) / PayStream estimates the e-invoicing market is growing at 13% CAGR and is still at an early stage of adoption
8
Volume of electronic bills / invoices to increase 20% annually (Billentis data)

 


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