The first and finest B2B marketplace in Slovenia
CEE Startups are taking the global stage by storm, and having started 2017 with a bang; Invoice Exchange are the latest company from this region to bask in newfound success.
As well as winning the Central European Startup Awards 2016s’ Best Fintech category, they have now secured a €300k seed investment round including the government backed Slovene Enterprise Fund, and also earned an additional €80k investment from the CONDA crowdfunding platform.
We got up close and personal with Marko Rant — CEO and co-founder at Invoice Exchange who really nails it with his modest yet powerful insights into being successful as an entrepreneur in modern times.
Founded in 2015, Invoice Exchange is the first organised exchange for trading B2B receivables that enables companies to easily access cash by selling their outstanding invoices to financial investors through a secure, real-time online trading platform. Since it’s establishment, over 6million euros worth of invoices have been traded through the Invoice Exchange platform and we can only expect bigger and better things from this unique business venture in the near future.
Can you tell us in one sentence what the Invoice Exchange does?
We connect small businesses with the capital markets by establishing an organised exchange for trading short-term business accounts receivable (B2B invoices).
We all know entrepreneurship is a difficult road to take, especially in the world of technology startups; are there any mantras, hobbies or routines that you use to keep your mind and body healthy?
Not sure if this is a mantra or a routine, but for me it’s building relationships. As an entrepreneur, you are always pushing the envelope and that requires sustained dedication and focus, which takes up a LOT of your energy. I think it would be really hard to do that for a long period of time without having amazing people surrounding and supporting you. Steve Jobs famously said that you can only do great work if you love what you do — but that love translates into relationships and teams. Nobody can do it on their own and as an entrepreneur you can’t sustain the momentum for long if you don’t get along with people you interact with daily. So I think the way to keep balance is to build good relationships — at home with your family, at work with your colleagues, and off-work with your friends. I probably spend 1/3 of my time at work just nurturing our corporate climate and making sure that everybody is on board with whatever it is that we are currently doing. It is amazing to see how people perform better when they feel good at work.
“[sic]for me it’s building relationships[…]”
Talk me through some of your most challenging moments as a newcomer to the tech ecosystem and its respective markets? Some spectacular fails, or rocky roads you had to walk through?
Not sure if it’s very spectacular but I’d say perseverance was the key test of spirit in our case. My partner Tomi Sefman and I founded the company already back in August 2011 and then invested our savings to develop a pilot trading platform which we launched in June 2012. But that launch was short lived because we did not manage to attract outside seed / angel funding for our business at the time, so we shelved the idea and went on with our daily lives and jobs.
Two years later, in summer of 2014, we almost gave up and decided that we would try to sell the Invoice Exchange brand. We had a round of discussions with one potentially interested factoring company but in the end they refused, explaining that they didn’t believe it was a viable opportunity. That sparked defiance in us so we put on our poker faces and went out for our last effort to raise some funding. In October 2014, we secured an equity investment of €150k from two Slovene business angels and from there, on we hit the pedal.
“I’d say in life generally but in the start-up world especially, not giving up is a key principle.”
What do you value most in people? Especially those in your team?
An open mind. A childish curiosity to learn and do new things. Team play spirit.
What excites you the most about your work, and what is the moment that you are most proud of?
The exciting part for me is doing something new — disrupting industry standards and players. We operate in the factoring market which has been dominated by banks and private factoring companies for decades. There is something about being the new kid on the block, the David vs. Goliath story, that is immensely appealing to everyone. Everyone likes to cheer for the underdog. We want to show the world that a small start-up company can shake up the factoring industry.
As to the second part of the question, I’d say I am most proud of the trust we have built with our clients in a very short period of time. In our line of work (financial services) everything revolves around trust. The Invoice Exchange handles the clearing and settlement process for all trades executed through our platform which means we hold our clients’ monies. Relinquishing control over your money to a third party is a big deal in terms of trust. So everything we do is directed towards building that trust with our clients.
We have now gotten to the point where our investors — without even bothering to give us notice — just wire a couple hundred thousand euros to their IE trading account if they want to trade more invoices. I still get a WOW! effect when I see that — that’s trust we’ve built with our clients right there and then.
Why did you and your co-founders decide to build something like the Invoice Exchange? What was your initial inspiration or problem you wished to solve?
I got the idea for the Invoice Exchange in 2011 when I was working on a real estate development project. We were acting as the project’s investor and were intending to sign construction contracts with contractors. At the time, uncertainty in the construction industry in Slovenia was great and it was widely known that general contractors do not regularly pay their subcontractors. So I thought to myself: ‘How about we buy subcontractors’ claims against our contractors at a discount and then offset these claims against our own obligations to such contractors?’ In doing so we would effectively earn additional revenue in the form of the discount achieved, reducing our overall project costs. I went online to research this and was sure that I would find an existing ‘invoice exchange’ — a website containing information on who’s selling which receivables and at what price. To my surprise, I did not find any and thought that this could be a great business opportunity. I sent a middle-of-the-night email to my friends Tomi and Mateja Šefman and Tomi immediately ran with the idea.
What do you anticipate the most for the technology you use at the Invoice Exchange and your market in 2017?
We strongly believe that financial services are moving on-line and doing business over the internet enables a smoother and more convenient service for the clients. The Invoice Exchange is built around that concept. But moving financial services on-line is just the first step. Our platform is a typical B2B service and the next challenge is how can you integrate that directly into your clients’ accounting software and ERP systems for even more convenience. This is an exciting area of IT that revolves around APIs and system integrations and I expect our business will evolve into that direction. At the end of the day, we would like our client to have the option to sell an invoice on the Invoice Exchange directly from the accounting software which they are using — the minute they issue the invoice!
In your opinion what are the single best and the single worst things running a startup from Central Europe?
Not sure about Central Europe per and I think everyone is a bit biased when it comes to their home country. For me, Slovenia is a fantastic country to live and to work in. The start-up community is developing fast and it is great to be a part of that. Maybe the CEE region is still a bit off the radar in terms of the international start-up community but that does not bother us much. I think that it rather gives good start-up from these countries the opportunity to really shine and stand out.
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