ESF Capital has completed an investment in Satago – a new cash-flow finance solution for SMEs.
ESF has invested £1.6m in the equity of Satago as well as providing the platform with a £3m credit line. There’s scope for both investments to increase over time. Satago has been in pilot mode since January 2016, and is now officially launching an “all-in-one cash flow finance solution” for small businesses in the UK. Satago blends selective invoice financing with a free “credit control” platform for SMEs.
This credit control feature essentially boils down to a means of allowing customers to keep close tabs on the state of their cash flows, and by association their financial health. Clients can “visualise credit risk from their sales ledger” via a seamless link between the Satago platform and whichever online accounting software they use. This part of the service is free to use. Should a customer spot an impending rough patch, Satago will be on-hand to offer a “near-instant” financing solution. The close integration between Satago’s cash-flow management platform and the client’s accounting software package – and the data provided by that integration – is likely the driver of these near instantaneous funding decisions.
Steven Renwick, CEO and Founder of Satago, offered comment:
“Late payments are a perennial issue for SMEs, damaging their finances as a result. But with this support from ESF Capital, Satago has the firepower needed to finally put SMEs in full control. We’re the only finance company that actually tries to improve clients’ financial health before offering them finance, and we’re excited to now offer these capabilities to a much wider audience”.
Satago has in fact been in the works for some time. The platform became one of equity crowdfunder Seedrs’ inaugural campaigns when it raised £30k at a valuation of £184,286 in July 2012. Back then, Satago was wholly focused on the cash-flow management side of the business. The company has since raised a little shy of £10k and then £7,900 on the Seedrs platform, in March 2014 and May 2016 respectively. The March 2014 round was seemingly part of a larger £600k offline investment round.
ESF is an institutional P2P accelerator which acquired a 73.4% equity stake in secured business lending outfit ThinCats in December of last year. Since then, the company has somewhat unsurprisingly fielded a large number of reverse enquiries from peer-to-peer lenders on the hunt for both equity and lending capital. CEO John Mould told us in February that, were ESF to invest in another UK-based platform, it would have to be complementary to the ThinCats offering, rather than competitive. Satago certainly ticks that box.
Mould commented on ESF’s latest investment:
“Alternative finance is a rapidly growing sector, and Satago – boasting both the necessary technology and specialist expertise – will quickly become a key player in the sector’s progression. Satago is a clear complement to ESF’s broader business: particularly significant to SMEs seeking a range of finance options and investors looking to diversify their portfolios.”
"Satago was one of the first businesses to raise funds on Seedrs, shortly after we launched in 2012. We’re thrilled to see their on-going success. The institutional investment they have just raised is wonderful validation for a great company, and shareholders who invested in Satago a few years ago on Seedrs are enjoying a huge increase in share value as a consequence.”
AltFi is returning to Amsterdam for its second annual Summit in the city. The inaugural event last year was a roaring success, with key figures from across Continental Europe's alternative finance and digital banking sectors highlighted. These included Jeroen Broekema, managing director of Funding Circle Netherlands, and Mieke van Engelen, head of innovative partnerships at ABN AMRO's standalone lending platform, New10.