Based in Sydney, FundX was founded by David – former Australian small business builder and investor. According to him, the primary aim of the company is to connect businesses with investors who can fund their cash flows. Users are provided rapid access to funds based on the value of their outstanding invoices. FundX uses big data, machine learning and predictive algorithms to analyse risk and authorise invoice funding “with the push of a button, in less than a minute”.
“In Australia FundX is the only pure play technology company that offers single invoice discounting advancing fees with a simple repayment plan over 12 weeks. The business is run via a sophisticated machine learning credit algorithm developed in conjunction with KPMG and uses risk based pricing to set it’s advance rates in less than 1 minute transferring funds within 24hours.”
In addition to the technical details, the FundX boss was keen on highlighting that his platform offers “confidential facilities”, meaning that FundX won’t disclose its customers’ application to anybody. In other words, FundX will not contact a borrower’s customers or require users to open separate bank accounts in order to receive funds. This facet of the platform derives from the fact that companies that make use of invoice financing services are often poorly thought of down under, since awareness of the alternative finance space remains scant.
When asked about competition, David claimed that Australia is a young market and one that is far from saturated. He argued that competitors don’t represent a threat to FundX, since its peers in the online space generally offer small businesses loans with the traditional lines of credit that the banks offer, requiring them to be locked in for 12 months or more and often hampering their cashflow.
“The alternative finance market in Australia does carry P2P consumer loan businesses like SocietyOne and a range of P2P business platforms that are helping educate the market about the ability to loan funds online without having to go through the antiquated and often arduous application process that the banks put customers through.”
Considering that Australia’s alternative finance industry is at the very start of its journey – perhaps where the UK and US industries were in late 2010 and 2009 respectively – I asked David whether these two more advanced markets are in any way influencing development in Australia. The FundX boss agreed that the UK and US markets are completely different from the Australian sector, in terms of number of platforms, kinds of services offered, number of users and market awareness. He concluded that the UK and the US are not directly influencing the nascent Australian sector, but they represent a great source of inspiration in terms of business models and market dynamics.
Last but not least David focused on the challenge of scaling the FundX model. Surprisingly, he stated that FundX may look to break into the UK before long, rather than expanding into nearby New Zealand or Asia. The rationale behind this thinking is that general awareness of the sector among the UK public is uniquely high.
“The most obvious market for www.fundx.com.au to expand into is the UK market. The UK is a mature, well-educated market for alternative lenders in the single invoice discounting space and no one there operates the exact unique model FundX delivers.”
David was keen on highlighting that such a move is of course “easier said than done", but that FundX will be working on realizing the plan in the future.