CreditorWatch sets sights on banks after multimillion dollar investment
Friday, February 3, 2012/
Credit reporting service CreditorWatch has secured funding from Nightingale Partners in what is understood to be a multimillion deal, as it sets its sights on major clients including the big banks.
Founded in late 2010 by Colin Porter, CreditorWatch is an online service providing businesses, predominantly SMEs, with information about payment defaults and credit management tools.
It allows businesses to report bad debtors and to receive alerts when businesses they deal with are reported by CreditorWatch members.
Subscribers also place the CreditorWatch logo on their invoices, encouraging customers to pay on time. CreditorWatch are also licensed ASIC information brokers, providing company reports and ASIC documents
With more than 4,000 users, CreditorWatch has secured a strategic investment from Nightingale Partners, an investment company which provides expansion capital to growing businesses. The terms of the deal are undisclosed.
Nightingale Partners is partly owned by the private equity fund of Lazard Australia Private Equity, which recently sold Dun & Bradstreet Australia for $233 million.
Nightingale Partners will hold a minority stake in CreditorWatch, and director Christian Bernecker will join the board of CreditorWatch.
The funds will be used for marketing spend to promote rapid growth and fund further expansion of the CreditorWatch business into the SME and corporate sectors.
“Initially, we didn’t intend to attract corporate members as we focused our marketing on the SME sector,” Porter says.
“However, in the last three to four months there has been a serious interest in CreditorWatch from big business as a result of their interest in monitoring SME activity.”
“The investment from Nightingale Partners allows CreditorWatch to expand far more rapidly than could have been achieved through natural growth alone.”
Porter says Nightingale Partners won’t be involved in CreditorWatch on a day-to-day basis, but will have input on the company’s growth strategy, particularly as it takes on new clients.
“They have relationships at the top end of the town, and it always helps to have those connections. The banks [are a major target],” he says.
“They’re going through lots of changes and introducing new things, particularly to address privacy issues. They’re spending a lot of money on technology to get up to date on these issues.”
“It’s a just a waiting game but the banks are definitely a target for us.”
Bernecker says Nightingale Partners believes the SME sector is underserviced at present, which is why CreditorWatch was an attractive investment.
“We think there’s a gap in the market,” he says.
CreditorWatch currently employs around eight people but has big plans for both the Australian and overseas markets.
“The first 12 months was spent trying to prove the service would work and that we could reach our targets. We’ve got another strategy to get to the next space,” Porter says.
Porter says there are no immediate plans to secure more funds, insisting the company is “fine for the moment”.
“I’ve given away as much equity as I want to at the moment, which still allows us to do everything we want to do,” he says.