No longer should cash flow inhibit the ability of a business to tender for bigger deals or buy more inventories. Skippr provides the tools that give businesses foresight and control over their cash flow.
Tell us a little bit about your idea and what made you decide to take the plunge and make it happen?
We saw the huge opportunity in the SME lending space following the success of alternative lending in the UK and US markets. Alistair had just spent 4 years working in the UK working for a fintech P2P lender, MarketInvoice, and recognised how this model could be evolved for the Australian market. With Pat spending 8 years in Hong Kong as a Fund Manager, he saw how otherwise strong businesses were constantly raising expensive equity to fund working capital. This opportunity coupled with the structural problems in the SME lending space causing a lack of investment in banking technology, justified our move to take the plunge and start Skippr.
At Skippr we take a more holistic approach to cash flow management. There are quite a few moving parts in the purchase-order-to-payment cycle such as invoicing, credit checking, bank reconciliation and chasing debtors. Instead of building tools to manage with each step in this cycle, our tools help businesses understand cash flow drivers and how to optimise cash flow through invoice funding. What does this mean?
Firstly, through our cash flow forecasting tool businesses can identify particular points in the future when they are likely to run low on cash. Businesses can see how accelerating invoice payments from customers can help them take control of their cash flow and avoid cash crunches.
Secondly, we provide the mechanism for businesses to actually accelerate invoice payments through invoice finance. With more clarity and understanding of cash flow drivers, businesses can smooth out their cash flow cycle using the selective invoice finance tool.
Businesses can improve their cash flow without taking on any debt!
Can you please explain your business model?
Our core product is an invoice-funding platform whilst the cash flow forecasting tool is the ‘free stuff’. The invoice funding platform acts as a marketplace where a SME can sell their invoices to investors at pre-determined rates, based on our risk assessment. There are 3 key elements to assessing and managing risk: financial (credit) risk, invoice verification and predictive analytics. These processes allow us to price invoices more efficiently and build trust with investors.
Skippr generates revenue from the sales of invoices via the platform. We collect a fee from the SME (borrower) and Investor who purchases the invoice/s.
What are you working on right now and what are you most excited about in the next year?
Right now we are testing both the cash flow forecasting and the invoice finance tool. Working with accountants and CFO’s we are developing the tools in line with their feedback. By tailoring our platform according to their needs, will ensure these tools empower the user to manage cash flow more effectively.
This whole process will serve as an education piece for customer and partners alike.
How do you make ideas happen?
Simple – Plan, develop, implement and learn. Try to not over-think it too much but just put it out there so we can test and get feedback.
The challenge is to stick by this lean methodology!
What role have mentors played in your business life?
Mentors are pivotal in this journey. They provide that point-of-reason and refocus you on your end goals. It is quite easy to get blinkered, so simply using a mentor as a sounding board gives you perspective on the reality of your situation.
What does your typical day look like?
A small team we wear many hats across sales, marketing, product, legal and operations. Currently much of our day is made up of meetings with potential customers, accountants (partners) and investors; developing content to fuel our inbound marketing engine and ongoing management of the product development.
What challenges have you faced when starting or growing a business/organisation in Australia?
Skippr aims to use financial technology to deliver seamless cash flow management for an SME. There are two key challenges:
- Access to data: In Australia there are limited resources to access data on businesses although ASIC holds ample amounts of very valuable information for a business like ours. Relying on credit rating agencies for this information impacts our cost of acquisition considerably until we get a level of scale. This has fuelled our need to collect our own data, hence the reason we build the cash flow forecasting tool.
- Legacy banking systems: Many fintech businesses are held to ransom by the clunky, slow and expensive bank payment systems. Unfortunately, banks struggle to innovate as quickly as required given their size and the patchwork tech infrastructure. Therefore, our ability to transact as quickly as we want is inhibited.
Fortunately, we are seeing progress being made with the new policies and infrastructure like the NPP being rolled out in the coming years. Great steps forward but not soon enough!
The most encouraging change is Tyro Payments being rewarded a banking licence recently. With a mandate to become a technology SME bank, they are developing far more agile infrastructure based on open API. We see this as game changing and excited to see how they service SMEs in the future.
What is one idea you are willing to give away for free?
Advice on cash flow management. We truly believe building tools to optimise the cash flow cycle will enable Skippr to deliver funding to SMEs more efficiently, flexibly and competitively. Our tools are built to help SMEs manage cash flow better BUT, on the flip side, they give us transparency of a business so we can deliver low risk funding.
What people/companies/organisations do you think are doing really cool stuff in your industry, in Australia at the moment?
- Tyro Payments – evolved from being a POS merchant provider to now being a tech bank. Building an open API eco-system to democratise banking.
- Neu Capital – a fellow start-up trying to deliver more liquidity to where it is need. Focussed on the mid cap space they have created a marketplace where companies can source debt or equity from institutional investors more efficiently.
- Sharon Lu – Commercial Manager at the Tyro Fintech Hub. An invaluable asset to the hub, she evangelises fintech in all facets and has provided valuable direction and introductions for our business since residing.
What about internationally?
I can’t really think about that yet and there is plenty of opportunity in Australia to capitalise on. Our focus is to penetrate the existing $64bn Invoice discounting market but more importantly activate sector verticals that traditionally have not considered invoice finance as cash flow and growth tool for their business.
What role do you think business can play in affecting social change?
We are part of this wave of innovation that is sweeping the Australian economy. This is a significant social change that needs to be supported by business and government to drive a more vibrant society.
When you look at places like London, Tel Aviv, Silicon Valley, innovation has driven a more sustainable environment for future generations. No longer can we rely on being the “Lucky Country” and simply leverage our mineral wealth.
Speaking of affecting social change, Is there a particular charity you’d like to support?
Going to have been selfish here and support the Alem Foundation – a grass roots charity that delivers education and aid to under privileged children in Ghana. Alistair co-founded this foundation in 2014 and since has got over 30 children into school and delivered clean drinking water to a small village in Akisombo. Do check it out – www.alemfoundation.com
Name 3 websites you would recommend to our readers.
- GrowHack.com – loads of useful blogs about how to grow all facets of your business.
- Daily Fintech blog – well informed and knowledgeable outfit that delves into all that is fintech.
- Hubspot blog – fantastic resource for budding smarketers (Sales and Marketing) to understand everything about inbound marketing.
Can you name 3 Australians we should follow on Twitter?
@jessicaellerm – Fintech evangelist, growth hacker.
Jost Stollman – CEO of Tyro. Leading a banking evolution and always has a stern point of view.
@AlanKohler – equipped with a dry sense of humour, evangelises fintech and provides a poignant point of view on financial and economic issues.
Are there opportunities for people to get involved with your idea?
Being so small and ambitious we are looking for everything at the moment.
Firstly, interns with marketing, finance or sales expertise who are keen to contribute to the foundations of something big. Our focus is currently on content generation and market research.
We’re always keen to have a conversation with funders who can provide resources that compliment our business. Furthermore, we are taking applications for investors for our marketplace. Investing in invoices is a new short-duration, high yield asset class, so could be invaluable for an investors portfolio.
What’s your favourite bar/café/restaurant?
Love enjoying a beer at the revamped Hotel Palisade down in the Rocks in Sydney. It’s the best view in town.