LFP180 – Ever-More Sophisticated Fintech Propositions – Inventory Monetisation w/Alessandro Zamboni CEO Supply@Me

Fintech is increasingly getting well beyond providing the simplest of transactions and deep into the complex end of FS. Supply@Me Capital are listed on the UK Stock Exchange and recently acquired Singaporean firm Tradeflow Capital.  They provide inventory financing by securitising manufacturers’ and trading firms’ inventory in a very interesting fashion leading to a new […]

Fintech is increasingly getting well beyond providing the simplest of transactions and deep into the complex end of FS. Supply@Me Capital are listed on the UK Stock Exchange and recently acquired Singaporean firm Tradeflow Capital.  They provide inventory financing by securitising manufacturers’ and trading firms’ inventory in a very interesting fashion leading to a new investable asset class and better funding for the businesses.

The LFP has covered various forms of Trade Finance in the past from financing suppliers to financing purchasers – in effect financing goods in transit – and all sorts of invoice discounting. However we have never before had a Fintech who promises to finance unsold goods in the warehouse.

In this episode CEO Alessandro Zamboni guides us through the evolving structures that Supply@Me provides via it’s platform – the motivation of which is once again to expand the range of capital providers to business by making previously uninvestable asset classes investable thereby providing a good deal for both parties and a turn for the platform in the middle.

Topics discussed include:

Alessandro’s journey from musician through consultancy to CEO and inventory financing
the relevance of the background in regulation of banks to know what the parameters were of the current market
founded in 2017, listed in UK last year
historically working capital was funded by banks who, however, made loans to the company – with plenty of context, terms and conditions
asset-based finance was generally applied to matters such as machinery
Supply’Me’s innovation is to create a marketplace for inventory purchased and wrapped-up inside a special purposes vehicle with a repurchase agreement when the manufacturer/trader had a commercial agreement to sell the inventory himself
the move from cash-based working capital financing to asset-based working capital financing
not a debt but a commercial facility to monetise the inventory whilst keeping the stock in your warehouse – so not a financing but a monetisation
a capital markets approach to monetisation
where does the commercial risk lie?
the platform has no market risk but bridges the inventory side with the buyers of financial assets
the platform digitalises the inventory via legal structures
details of how the structuring works
creating a diversified portfolio in the SPV to sell a range of asset types in one vehicle thereby spreading the risk
moving towards more ~”mutual fund” structures which over time will be more globally marketable
this is the motivation for purchasing Tradeflow Capital this year
Supply@Me are in 16 sectors right now from livestock through wine to toys and many more
their model is more flexible than asset-based/capital markets general desire for liquid assets
a Case Study of toys
diving into how the mechanics would work in the case of an inventory of wine
importance of the legals/accounting as well as the simple tech angle
the platform buys at book value + a margin – not a discount
the former owner now acts as an agent to sell the wine and buys back at the same price with a profit share on the final sale price to the end-buyer
what happens in the case of failure of the agent to sell the inventory
monitoring – KPIs/checks etc to ensure that the assets aren’t subject to mismanagement, fraud etc
the role of servicers
the increasing demand for higher yielding more illiquid assets
Supply@me’s future plans and partners they are looking for to expand the business further
monetising in-transit inventory as well as in-warehouse

And much more

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