Back in 2015 when Charlotte and Andrew Petris launched fledgling startup Timelio, fintech was barely a word. Certainly no-one had heard of COVID-19 or the accelerated digital revolution that would come with it.
But six years later, chief executive Charlotte Petris is at the forefront of the pandemic-driven invoice financing boom.
Having just secured a $270 million warehousing debt facility, with Goldman Sachs as a senior lender, Petris is now readying Timelio for its next phase of monumental growth.
The facility, which also includes investors from the existing Timelio Capital Fund, marks a significant milestone for the startup, as well as a change in direction.
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Timelio started life as a marketplace for invoice financing, matching businesses with investors to help boost cashflow while they were waiting for payments from their own customers.
Running a marketplace requires a constant juggle between the business and investor, Petris explains. The balance is never quite perfect.
Transitioning one side to a funding warehouse means the fintech can lend to more businesses than ever before, and in greater volumes.
This funding is “the key to unlocking our growth and our future ambitions,” opening up a new phase in the evolution of the business, Petris says.
“But to get to that point, especially with someone like Goldmans, you need that six-year track record.”
Timelio had the proven risk models, processes and maturity, says Petris, and it’s now ready to “aggressively” ramp up growth.
“We wouldn’t have even been thinking about this in the early days.”
Growth during COVID-19
To date, Timelio has provided $1.5 billion in funding to business owners. The average loan size is $1 million, up from $250,000 in 2017.
Over the past six months alone demand has been trending up by 15%, month-on-month, and the startup is acquiring twice as many new customers each month as it was pre-COVID.
Since the onset of the pandemic, Petris has noticed more demand coming from the fast moving consumer goods markets, including in the beauty, personal products and food and beverage sectors.
That reflects consumer behaviour and where people are spending. But it’s also indicative of innovation in those sectors, and of businesses growing.
At the same time, these industries have been affected by supply chain delays and other disruptions linked to COVID-19, leading to additional funding requirements.
A sector adapting
Timelio is not the only fintech bridging cashflow gaps for SMEs. Existing cashflow challenges have only been exacerbated by COVID-19, and more solution providers have popped up to meet increasing demand.
The space has changed dramatically since Timelio entered the market. At the time, ‘fintech’ was a fresh new buzzword, recalls Petris, and there were only a few dozen businesses “breaking new ground” and innovating in financial services.
“Over five or six years, the scale of what fintech is has changed significantly,” she notes.
In March 2020, the pace of change picked up even further, as entire industries moved online and innovations in things like legal tech and payment processes made it easier for businesses to use fintech lending products.
Small business owners are also more trusting of digital financing providers, Petris suggests.
In the alternative-financing space in particular she’s noticed a change in attitude towards tech-enabled products.
Just as consumers have become more comfortable shopping online and using alternative payment platforms, for example, business owners are realising the options available to them if they are turned down by their bank.
Trust at the heart of fintech
Trust has been key to Timelio’s success so far, Petris says.
The startup is still working with businesses that have been on the books since day one in 2015 — businesses that have grown and forced Timelio to grow with them in order to meet their needs.
For any business, growth comes with bumps in the road, Petris muses, but in fintech, it’s trust that will keep customers on board throughout.
“Trust is what underpins everything else you’re offering.”
When your customers are small businesses, the products you’re offering can truly be the difference between survival and closure.
“If you’re authentic and genuinely doing the best for your customer, and they trust you and you respect and trust them, that is what’s missing from some traditional financial products out there.”