Building a Financial Giant with Lex Greensill, Founder and CEO of Greensill Capital
In this podcast, Miguel Armaza sits down with Lex Greensill, Founder and CEO of Greensill Capital, a leading provider of working capital and supply chain finance solutions for businesses and individuals around the world. Founded in 2011, Greensill employs over 1,000 people worldwide and has raised close to $1.3 billion in equity from some of the largest funds in the industry, including SoftBank and General Atlantic.
Lex Greensill grew up in a family of farmers from the countryside of Queensland, Australia. Upon graduating high school, Lex recognized the family business was experiencing challenging times and decided to attend night school for university while working on the farm during the day. Living through a trying financial experience helped him realize the working capital difficulties of the farming industry. Farmers invest a lot of time and resources to produce their products and then need to wait an additional few months after delivery to get paid.
Lex eventually left the family farm and joined a Supply Chain Finance startup in Australia, where they would help businesses get paid early by charging a small fee. Although the business eventually failed and went bankrupt, he saw a lot of value in the product and decided he was going to try to build a better version of the company elsewhere. This place ended up being Morgan Stanley, which he joined after moving to the UK to pursue his MBA. A successful sting at MS eventually led him to Citigroup, where Mr. Greensill continued focusing on Working Capital financing and helped build Citi’s Trade Finance EMEA franchise. During his time at Citi, he also realized the floor was shifting underneath their feet and new technologies were driving innovation and large banks like Citi were not able to adapt at an appropriate pace. So, he figured he would try to build a better product by himself and left Citi to launch Greensill Capital in 2011.
To launch the company, Lex decided to go back to his roots to focus on helping Australian farmers secure financing. The initial goal of the firm was to serve those businesses considered too small for large banks like Citi and Morgan Stanley and he never imagined Greensill Capital would eventually be competing with big banks and serving all types of clients.
Organic and Inorganic Growth
Over the last nine years, Greensill Capital has evolved from a two-person startup to an institution with over 1,000 people that provided over $140Bn worth of credit in 2019 to businesses in 175 countries. In Lex’s own words, they never imagined the company would be this big, yet in 2020 they still only serve less than 0.10% of the global Supply Chain financing market, representing an enormous opportunity to go after.
Although most of their results come from organic growth, Greensill has not been afraid to be acquisitive and over the last four years has acquired four companies, including NordFinanz Bank, a well-capitalized bank in Germany that has served as a liquidity engine to the company, and, most recently, Omni, a Latin American working capital startup based in Colombia and Chile. The Omni acquisition is also a recognition of the potential of the Latin American market, where you need local operators and a local strategy to succeed.
Importance of Human Capital
Over the years, Greensill has managed to attract outstanding industry talent, including Managing Directors and senior leaders from some of the largest banks in the world. Lex credits their company culture as the main recruiting tool, where every employee is a shareholder and shares a single annual equity bonus pool. This culture of ownership makes everyone pull in the same direction and have the same north star. In addition, Greensill’s mission of aiming to change the way finance works has inspired candidates who want to make a difference and be part of something that aims to leave a better world behind.
Greensill’s exponential annual growth has also presented new challenges for Lex. He has had to adapt from managing small teams to now leading a complex and global organization with over 1,000 people. He credits his board, mentors, and leadership team for helping him navigate these challenges while also managing and growing the business.
Supply Chain Finance in Times of COVID
Although the COVID crisis has been challenging for the industry, Greensill Capital is actually thriving these days. Annual volumes have doubled year over year and investor appetite for their asset class has also risen. They have never seen this level of demand. The pressures of the crisis have led companies and individual clients to demand financing solutions allowing them to get paid faster for goods and services that have already been delivered and completed. On the other hand, the decline of rates and a flattening yield curve has drawn new investors and increased demand for short-term trade finance assets. Short duration liabilities are temporarily appealing to investors who usually buy assets with much longer maturities. As a result, at a time where a lot of financial institutions are cutting back financing, Greensill has been able to increase the supply of capital to its clients.
On Entrepreneurship
Lex remembers his mother always used to point out how he loved building Legos, but once they were done he would pull them apart and build something else. In a way, this represents his entrepreneurial nature. While he encourages everyone to try their hand at entrepreneurship, he also recognizes it’s not an easy or straight path. Entrepreneurs encounter plenty of bumps in the road to executing their vision and trade away certainty for excitement. However, the adrenaline rush of being part of creating something new makes all of it worth the while.
Lex Greensill
Lex Greensill, Co-founder and CEO of Greensill Capital, saw first-hand the impact that an inefficient financial supply chain can have on a family’s finances, growing up on his parents’ sugar cane farm in Australia. Farming sugar cane is highly inefficient when it comes to working capital and getting paid. It takes up to 18 months to grow the crop and then another 12 months to get paid for it.
Lex’s parents couldn’t afford to send him to university. He clerked at a country law firm, studied law at by correspondence at night and worked pro-bono for the Queensland Fruit and Vegetable Growers Association with a brief to make sure farmers got paid promptly. That principle, and the payment code Lex devised for farmers in Australia, became the foundation of Greensill that still guides the company today.
Lex’s vision was always to make finance fairer for everybody. As a business, Greensill is harnessing its technology and financial expertise to accelerate the movement of cash into the real economy.
Lex previously established the global SCF business at Morgan Stanley and led the EMEA SCF business at Citi.
Lex holds an MBA from Manchester Business School and is a Solicitor of the Supreme Courts of England and Wales, and Queensland.
In 2018, Lex was awarded the CBE for services to the UK economy.
About Greensill
Greensill makes access to finance faster, cheaper and fairer. Powered by financial technology but with deep expertise in credit management, we accelerate the movement of capital to where it is needed most, in the real economy. And through our vision of equal access to finance, we want to revolutionise the world of work, so no-one should have to wait to be paid.
Greensill is the market-leading provider of working capital finance for businesses and people globally. Our more than 800 specialists worldwide have provided $143bn of financing in 2019 to more than 8m customers and suppliers in over 175 countries.
