London-based fintech start-up Clear Factor founded by ex-bankers from Lloyds Banking Group, Bank of England, CHAPS, HSBC, and Deutsche Bank has completed their pre-seed round from a group of investors, including Decimal Factor (UK-based lending-brokerage platform) and NYC-based VC SMC Capital.
Clear Factor is developing the invoice financing marketplace for SMEs. In Q3 2020, the firm will roll out the solution to the first 1,000 SMEs. ClearFactor has been built on its strategic investor Decimal Factor’s existing 10-year-old lending-brokerage platform. Decimal Factor owns data of 670,000 UK-based SMEs, and has obtained funding for over 1,000 of them. The platforms’ partner lenders include Lloyds Banking Group, Liberis, Funding Circle, IWOCA, Fleximise, Boost Capital and many others.
ClearFactor will be launched in the UK, but the team is working on the global expansion plans in partnership with several world-renowned blockchain infrastructure players.
“Invoice financing market is quite large (around $2.6 trillion), regionally fragmented, and over-demanded. There is a lack of adequate and affordable solutions for millions of SMEs, but at the same time, there is a considerable demand from them (only in Benelux, the leader of the invoice financing market has reached $420M transactions volume). Also, SMEs are the most underrated market players. Regardless of the value that they produce to the global economy, banks are still pretty conservative in providing invoice financing to them. We believe that technical innovations (blockchain), automation, an experienced team, and thousands of onboarded customers will help ClearFactor to make a positive impact on SMEs in the UK as well as all over the world. Traditional financial institutions are trying to get exposure to single invoice finance, through investing in startups, for example, Market Invoice, which raised $33M from Barclays and Santander.”
John Slyusarev, a Managing partner at SMC Capital
‘’This partnership will deliver an exciting, transparent and fair invoice finance opportunity to micro SMEs. Having worked with the SME sector for over 15 years, I know how valuable the Clear Factor platform will be once implemented. Decimal Factor will bring its expertise, software and our platform to this partnership to ensure maximum success’’,
Manoj Karkhanis, CEO of Decimal Factor.
‘’We are delighted about this collaboration. Decimal Factor’s wealth of experience, automation and deep knowledge of the SME market will help us design and build a robust platform where micro SMEs can transact their invoices, and lenders from around the world will be willing to fund them. Working Capital is the lifeline of every business, and we are pleased that Clear Factor can provide a unique offering in this category of Invoice Finance’’,
Sanjay Padhee, CEO of Clear Factor.
About Clear Factor:
London-based Clear Factor Limited is building an open, transparent, decentralized and global ecosystem to bring fast low-cost invoice finance to small and medium businesses (SMEs) requiring cash flow while taking away the contractual binds, minimum factoring needs, charges, exit barriers, personal guarantees and performance-measures imposed by banks. Combining reward-based underwriting, CF-DF scoring, replication of successful investment strategies, a transparent auction and consensus between investors and the SME, Clear Factor will allow investors access to one of the safest and shortest time-framed investment instruments that have been hitherto available only to large funders.
Clear Factor aims to disrupt these global invoice finance markets and has built a passionate team with extensive experience in invoice finance, insurance, payments infrastructure, IT development, cybersecurity, decentralized protocols, and digital-asset trading. It’s building its MVP in partnership with Decimal Factor and Electi Consulting, which are both Clear Factor equity holders.
About Decimal Factor:
For over 10 years, Decimal Factor Limited (https://decimalfactor.co.uk) has been helping UK SMEs find funding for their working capital requirements and is authorized and regulated by the Financial Conduct Authority, FCA. Globally, Decimal Factor arranges finance in the UK and USA, with plans to expand into the Middle East and South America where they already have operational offices supporting their existing markets. Decimal Factor is building significant multilingual capabilities in its global sales teams which helps in establishing trust and building relationships with SMEs across the diverse but unilingual communities. In a market facing a snowstorm of lenders and their confusing offers, Decimal Factor has been particularly effective in providing the ‘last mile’ connectivity between the responsible lenders and the SMEs.
Decimal Factor has assisted over 1000 businesses in the UK to secure funds. Since 2008, it has arranged over £50 million in various types of funding products and has strong partnerships with lenders such as Liberis, Funding Circle, Lloyds Banking Group, IWOCA, Fleximise, Boost Capital to name a few. Decimal Factor is also a master service provider for Credorax in the UK & Europe. Decimal Factor also offers a bespoke Payments Services Platform that cleverly connects products, services and payments seamlessly with retailers. This helps its customers i.e. SMEs, merchants and retailers to take payments from their consumers and allows them to offer bill payments, prepaid vouchers, and other payment services.
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