MarketInvoice, one of the leading marketplace lenders in the UK, has announced the launch of MarketInvoice Pro. The new product is an open funding line that is secured against a business’ outstanding invoices. Until now, MarketInvoice has offered just one product: selective invoice finance.
The platform has financed a grand total of £1.1bn worth of invoices to date, with a historical average of 80 per cent lent against those invoices.
But while the cumulative lending figure for MarketInvoice is now approaching the billion pound mark, the company’s outstanding loanbook tends to pale in comparison to its peers. The cause of this is the product’s shorter average term of 41 days. Most marketplace lenders have an average term of between three and five years, meaning that investor capital is tied up for a lot longer.
The chart below (from AltFi Data) shows the platform’s outstanding principal has only once breached the £30m mark.
The short-term nature of the MarketInvoice product has its advantages. Head of investors Aman Mehra recently told us in an interview that shorter terms allow for faster information feedback, which translates into more effective portfolio management. But a low outstanding volume will be an issue for institutions that are looking to put large amounts of money to work. The new MarketInvoice Pro product could fix that.
MarketInvoice anticipates an immediate impact on its growth. The firm says that it expects to double its lending in 2017, which would mean hitting the £2bn mark by year’s end.
“MarketInvoice Pro is a natural evolution of our business and brings a fresh and innovative approach to solving the biggest issues for businesses in the UK; available cash-flow,” said MarketInvoice’s CEO and co-founder Anil Stocker. “Our track-record of exceptional customer service with businesses and their reciprocal trust and faith in us, means we are confident of delivering more funding and success for them.”
While MarketInvoice boasts a historical customer retention rate of 81 per cent, driving that figure upwards in the future had to be another big factor behind the new product launch. Stocker conceded in a recent interview with AltFi that MarketInvoice will occasionally lose customers that have grown too large to continue using selective invoice finance, and that have developed a permanent need for capital. The company will be hoping that the option of an open funding line will keep these customers on board in the future.
But the new lines will not be made available to all customers – only to those that use one of the eight accountancy software packages with which MarketInvoice is integrated. Extracting data via these integrations is how the platform will monitor the outstanding invoices of a business on a continuous basis.
Commenting further on the new product launch, Stocker said that he thinks Brexit is a huge opportunity for MarketInvoice.
“In every period of turmoil there exists huge opportunity – we believe our model will mature through this cycle, and prove we are here to stay,” he said.