The nearly five-year-old Singaporean invoice trading platform Incomlend on Tuesday announced that it raised USD 20 million in its Series A round led by Sequoia India. Shipping giant CMA CGM, a shareholder of the company, participated in the round.
Incomlend runs a marketplace where trading companies can sell their accounts receivables to “world-class” institutional investors, who profit by buying them at a discount. Once there is a match, the seller gets cash, while the investor will have credit insurance coverage until getting repaid.
“We see quite a lot of volume,” Incomlend CEO and co-founder Morgan Terigi told KrASIA in a recent phone interview. “We now have companies on the platform that are billion-dollar companies.” Terigi built Incomlend together with Dimitri Kouchnirenko, who—like him—graduated from HEC in Paris.
The initial success attracted interest from trade heavyweights. In October, the startup announced a partnership with CMA CGM, which uses the platform to gain access to Trade Finance. The partners are digitizing bills of lading—an essential document in all shipping transactions—and automate the process. “We need to get the information as accurately as possible,” said Terigi. “Once there’s a shipment, there is a payment.”
Terigi describes this as “essential” to protect the company against fraud. “We haven’t had a situation yet, but it can happen that transactions never take place, that documents are not genuine.” Other potential risks are disputes between parties, which aren’t covered by credit insurance.
The market is nevertheless attracting many players. Terigi said that there are several other platforms that have matured in the past five years, although they might not operate in the same way. “We will probably see platforms merging,” he predicts.
Incomlend now counts hundreds of clients. “Investors have become more cautious,” he said. Industries that were good ones half a year ago are not necessarily the good ones today. He observed that investors are more keen to put their money into things related to food and soft commodities.
“We have to be cautious”
“We still have a lot of volume on the funding and receivables, and we are getting credit insurance as well,” said Terigi. “It’s all about matching everything.” He realized that companies with good grading which were difficult to access before are now in reach to become possible partners.
The company said that it will use the new funds to expand in Europe, Southeast Asia, and North Asia. It also appointed former Fiserv and First Data executive Marc Mathenz as deputy CEO. Terigi added that Incomlend is working on further partnerships and deals, and that there will be announcements soon. “We are starting to have more visibility now,” he said, but believes it’s too early to declare victory over COVID-19: “We have to be cautious.”