Sequoia-backed Incomlend eyes Asia, Europe expansion with $20m top-up

Incomlend, a Singapore-based online invoice trading platform, has raised US$20 million in a series A equity funding round led by Sequoia India.

Shipping and logistics firm CMA CGM Group also participated in the round, according to a statement.

Incomlend CEO and co-founder Morgan Terigi / Photo credit: Incomlend

What problem is it solving? According to a 2019 report by the Asian Development Bank, over 40% of trade finance applications from small and medium-sized enterprises are rejected by banks. This is more evident in high-growth Asia, the report suggested, where SMEs need more financing options to meet growing demand.

“Currently – and Covid-19 has made this even more true – it is very difficult to find stable assets [that are] relatively low-risk, fairly liquid, [and] that would also be uncorrelated to financial markets with decent yields,” Morgan Terigi, CEO and co-founder of Incomlend, told Tech in Asia.AD. Remove this ad space by subscribing.Support independent journalism.

Incomlend said it aims to solve the credit crunch that has been slowing down the growth of cross-border trading companies worldwide. It does so by connecting institutional investors with exporters and importers through its platform.

In this way, exporters can get paid early for supplied goods and services, while importers can extend payment terms and minimize the risk of supply chain disruption. Investors, on the other hand, can access an alternative asset class, potentially speeding up return on capital.

Incomlend’s platform is powered by a proprietary technology for risk underwriting, fund matching, and transaction processing. It works as a marketplace where companies can tap into a pool of private investors.

Compared with more traditional financing solutions, the startup claims it can onboard clients and process trades faster while providing companies with an alternative and balance sheet-neutral source of funding.

What are the opportunities and the challenges? Terigi said that the trade finance space that Incomlend operates in is a multitrillion-dollar environment, which led the company to be strategic with its approach.AD. Remove this ad space by subscribing.Support independent journalism.

“The opportunity for Incomlend to gather the right portion of the market remains considerable, and Incomlend could only grasp a minute portion with the challenge of having that portion as diversified as possible,” the chief exec noted.

Terigi also said that ultimately, the Incomlend trade receivable is cross-border, credit insured, and fully diversified across regions and industries, making it very liquid.

However, he also noted that the economic environment is constantly changing. “Increasing financial yields are an element of instability. The change of appetite of investors and credit insurances is also adding a challenge in the current situation.”

But Incomlend believes in its ability to diversify, enabling the company to overcome these hurdles to a certain extent, Terigi said.

What are its future plans? The startup said it plans to use the new funds to further develop its technology and drive its expansion into Europe, Southeast Asia, and North Asia.AD. Remove this ad space by subscribing.Support independent journalism.

According to Terigi, the company’s expansion has already started with a team of roughly 10 people in Western Europe. It has also already added a few people to beef up its Southeast Asia team.

On the product side, Terigi said that Incomlend aims to seek growing integration with other platforms to gain further access to information for its users.

“The future of all fintechs is really to gain in platform-to-platform integration, not just with other fintechs but also with other banks or financial institutions in the near future,” he added.

Who are the team members? Terigi founded Incomlend in 2016 alongside Dmitri Kouchnirenko. The two co-founders have over 30 years of executive experience in global corporations.

Following the company’s series A raise, Incomlend has also appointed a new deputy CEO, Marc Mathenz, a fintech and payments veteran with over 15 years of experience.

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