The news that e-invoicing network Basware would be rolling out a factoring product first broke in September 2014, when we learnt that the company was joining forces with Arrowgrass Capital. The venture was then slated to go live at some point in 2015. The newly minted “Virtaus” launched last Tuesday, with the intention of providing businesses of all shapes and sizes with access to short-term working capital.
Basware Advance is the first product to have been spun out of Virtaus. SMEs that are plugged into the Basware Commerce Network may use Basware Advance in order to receive early payment for outstanding invoices, for the sake of managing cash flows. The solution will be made available across the world, starting with a UK launch in early 2016.
To clarify, Virtaus is the financing engine that has been jointly developed by Basware and Arrowgrass. Its purpose is to manage Basware Advance, but also to develop further “smart financing” innovations. Indeed, Basware has suggested that Virtaus may in fact be drawn upon by “any B2B network” as a means of offering financing solutions to customers. The Basware Advance product connects SMEs to the Virtaus cloud financing tool, where they can access funding for invoices.
By accessing Basware Advance through the Basware Commerce Network, SME owners are able to track the status of their invoices, specify the details of the funding that they require, sign an agreement and use an online dashboard in order to keep tabs on the status of that funding. Needless to say, the depth and transparency of the information available on the Basware Commerce Network – within which members send and receive millions of invoices – makes Basware Advance a compelling investment opportunity. The Basware Commerce Network is the largest open business network in the world, connecting 1 million companies across 100 countries. A dizzying 100 million invoices with a combined worth of over $500 billion have been processed by the network to date.
We doubt that Arrowgrass was alone in vying to become Basware’s capital partner of choice. Henry Kenner, CEO of Arrowgrass Capital Partners, offered his thoughts on the new initiative:
“Arrowgrass’ strategic partnership with Basware and the launch of Virtaus aim to solve the problem of businesses not having immediate access to short-term working capital. The financing solutions that will be provided by Virtaus, in essence, aim to be simple and easy to deal with, open and transparent in their approach, and able to make funds available in an instant, not days or weeks. The joint technology platform and real-time risk engine enable us to offer lending that is at once flexible, highly competitive and responsible.”
Esa Tihilä, CEO of Basware, also weighed in:
“Paying invoices or getting them paid on time is a challenge for many companies, especially for small and medium enterprises (SMEs). The benefits of offering real-time and flexible financing alternatives impacts both suppliers and buyers, improving their bottom line and empowering companies of all sizes to optimize cash and working capital, which enables further investment and potential growth. Virtaus, the financing engine and joint venture between Basware and Arrowgrass, has been created to offer financing across the open Basware Commerce Network, connecting over 1 million organizations globally today, offering a fresh, easy and online alternative to traditional lending options.”
