Fineon Exchange | X-Europe Startup Interview
Welcome to our X-Europe startup interview series. We have virtually sat down with a number of our founders from past cohorts to hear all about their solutions, vision for the future, and what made them tick during our X Europe programme. So whether you are a deep tech founder looking for startup support, an eagle-eyed investor, or simply interested in the possibilities that technology can bring to society, then we welcome you to take a read. Please meet Fineon Exchange, a global FinTech export finance marketplace.
Can you briefly explain what your solution is all about? What’s unique about it?
The value of global export trade has grown exponentially since 2000 and the global export market is valued at approximately $19tn. Whilst modern communications have facilitated the ease with which companies can locate counterparties with which to trade, many companies, particularly MMEs and SMEs struggle to access financial support for their export flows, due to limited knowhow and lack of investor visibility. This has led to a $1.4tn global trade finance gap.
The Fineon Exchange marketplace addresses these challenges by focusing on matching MMEs' export finance portfolios (regardless of asset type) with potential funders. Technically, we use AI to validate their trade finance requirements and match them with the most appropriate funders and credit insurers to support their end-to-end trade finance needs. Our AI Robo advisor allows us to optimise data sets to facilitate these matches, which differentiates us from the competition.
Unlike the majority of our peers, we provide a funder agnostic/neutral environment and we also engage insurers, who play a critical role in the financing of trade. By placing the underlying transaction at the forefront of the platform offering we help to build trust between funders and exporters, thereby facilitating the best possible pricing and coverage of the transactions.
What business sectors do you target? How does the technology make an impact?
We are industry sector agnostic and target Mid-cap to Large exporters (manufacturers, traders, wholesalers) that require export finance solutions, as well as Funders (banks & non-banks) with a risk appetite for developing and emerging markets. We also collaborate with Insurers looking to grow their trade credit insurance portfolios and support Brokers that are looking for funding options for their exporting clients.
The Platform is based on an AI Robo Advisor (AIRA) that is built on a proprietary set of algorithms which makes it difficult to replicate. AIRA focuses on Optimizing exporters' financing requests in order to generate as broad a range of matched funders as possible. It starts learning from the funders' preferences using a rules-based engine which analyses their behavior over time, using optimization algorithms to identify which requests they are likely to find more appealing. As such, AIRA advises the exporters what to amend in their financing requests, in order to guarantee optimal funding conditions and coverage.
The platform also employs advanced business intelligence and big data analytics rules to generate reports and market insights for funders. At a future phase and when enough data is available, Machine Learning could be used to perform market pricing and coverage predictions, as well as industry forecasts.
What’s the biggest milestone your startup has achieved so far, and what challenges are you still trying to overcome?
The fact that we have onboarded over 30 exporters and 12 funders to the Fineon Exchange marketplace platform, resulting in the processing of over USD 150 million worth of transactions, is a great milestone to have achieved, given that we officially launched the marketplace in the last quarter of 2020.
We have also developed strategic partnerships withing various businesses that are compatible with ours, including with Aon Credit Solutions (the largest insurance brokerage firm in the world) and with a German Supply Chain Finance platform. These will enable us to scale at pace, as will the growing number of partnerships with other (sector-specific) B2B marketplace platforms, that are looking to diversify and enhance the solution offering to their users.
Covid-19 and the subsequent lockdowns that were imposed because of it, have slowed down our go-to-market strategy as we are unable to meet with potential clients (corporates & financial institutions) face to face. Although there are no barriers to entry for new clients to join our platform (no registration/subscription fees), remote work has deeply affected our clients' decision-making processes and overall responsiveness.
Our platform is powered by Artificial Intelligence through our industry-first AI Robo Advisor (AIRA). As the current number of data points on the platform (such as industry trends, funders' changing lending appetites) is not currently as high as we would have liked, we have not yet been able to enable the full extent of AIRA's functionality and thereby completely enhance transaction workflows.
How has X-Europe helped you during the past few months?
We have greatly benefited from the various workshops conducted by X-Europe, specifically in terms of investment readiness preparations and growth training that have helped us fine-tune our go-to-market strategy, content, and marketing strategy and polish our investment pitch through X-Europe’s mentoring program. We have also benefited by getting matched with OTP Bank that has taken an interest in our platform and with whom discussions are advancing quite nicely.
After joining and benefiting from the services X-Europe has provided, what next steps do you envision?
In terms of a direct outcome from the programme, we hope to progress the pilot that we are entering into with OTP Bank to the commercial partnership stage. We also hope to meet other potential clients/ collaborators at the X-Europe partner events in May.
On a broader level, one silver lining of the Covid-19crisis has been the greatly increased pace of digitalisation of trade finance processes and the recognition by many in the industry that legacy paper-based processes have to change. Applying skills learned in the workshops that we have attended, we are focused on ensuring that we understand our potential customers’ workflows and on demonstrating the value that we bring to them, by helping them to leverage digital technology that enables them to manage their businesses more efficiently and thereby increasing their revenues.
What advice would you give to an entrepreneur trying to pave his/her way in the artificial intelligence / machine learning landscape?
Turning an organization into one powered by Artificial Intelligence (AI) requires everyone's participation and contribution, in order to finesse the data capture, data management, and data utilisation processes. Even though complete transformation takes time, it is possible to leverage elements of the AI right away. Also, before investing in AI applications, make sure you have all the tools you need to make them work. Calculate the internet speed you will need, decide which specialists you might have to hire, and plan for the inevitable additional costs you will incur.
What’s unique about the X-Europe programme?
While X-Europe is the first startup accelerator programme that we have entered into, we have cherished every workshop and mentoring session as we have met with a diverse pool of talented individuals and companies that are hungry for success. I would say that the matchmaking offering is by far the most important part of the programme as it connects participants with the right investors and potential clients. Such a feature is highly important for startups as if successful, it allows them to scale that much faster.