Grapple is a new peer-to-peer invoice financing platform that is capable of providing businesses with a finance facility funded by competing investors that bid down the price of finance in real time.
The platform has been launched by ex-Deloitte accountant Stephen Dawson who has partnered with SocietyOne Founder Greg Symons to bring the product to market.
Mr Dawson told Fintech Business that Grapple had gone through the same pains as other fintechs and using their platform could help other fintechs alleviate their cash flow issues.
“We are passionate about helping fintech businesses alleviate their cash flow issues because sometimes invoices may not be paid for six months to a year,” he said.
Mr Dawson said fintechs may still be building their platform at this point in life cycle and often there were not many avenues for them to access financing.
“Your options become limited and so Grapple is something that as soon as you get sales in you can alleviate the need for equity raising by financing the invoices and using that financing to keep your growth going,” he said.
Grapple works alongside Clearmatch, the tech engine that powers SocietyOne, to automatically match risk-graded invoices with investors and their predetermined risk appetites.
“Every customer’s invoice portfolio is individually risk-assessed which makes Grapple perfect for not only start-ups looking to finance only one invoice but for larger companies looking for facilities over $25 million where the cost of their facility can decrease over time,” said Mr Dawson.
Mr Dawson said it allowed businesses to say yes to more jobs, yes to purchasing new technology as they would be able to afford it by using Grapple.
“They (SMEs) can upload an invoice to Grapple, we will pay them to allow them to pay for what they need. This means they can take on as many jobs as they want through the power of invoice financing, they don’t have to worry about saying yes to anything or don’t have to say no more importantly,” he said.
“If you want to invest in your equipment, hire new staff or win a new job being able to get your invoices paid early can be really all you need."
The invoice financing system meant that companies and owners did not have to leverage off family properties or risk their credit cards but instead were able to access a new way of funding.
“We really want to get in there and make sure that these companies can be self-sustainable, not leveraging family property and just help them grow really because in a way it leverages the credit risk of their customer rather than their smallish growing company right,” said Mr Dawson.
There was still education to be done around invoice financing as not many in Australia knew about it, but most people understood what it meant for them.
“I think people look at it almost like a discounting of the invoice rather than an actual ongoing financing solution, which effectively it is. But they just see that they are getting paid early from their customer in a way, when really, it’s a financing method that they’re entering in too,” said Mr Dawson.
Mr Dawson said that for the next 12 months Grapple was focused on their clients and servicing the initial base and then investing further in that.
“The next 12 months is servicing that client base and building that growth and then investing in that, so in more tech and the processes. We will power into another capital raise at some point and obviously getting that growth is quite key for us,” he said.