How to optimize your cash flow — this is why AREX was created
SMEs in need to finance day-to-day cash flow – lending is under ever-growing pressure – fintech companies give the financial reins back to companies – AREX's story in a nutshell
The 21st-century company keeps its assets in the Cloud. Services are in the Cloud and the whole core business may be in the Cloud. Moreover, co-working spaces are used and machines are let from HSS Hire instead of being purchased. In practice, the switch to As-a-Service economy means that businesses have less material property and fixed assets on their balance sheets, which moves companies' financing needs from large one-time loans to day-to-day cash flow financing.
“The switch to As-a-Service economy has moved companies' financing needs to day-to-day cash flow financing.”
At the same time, the hands of banks and other traditional financial institutions are tied. Banks have been forced to tighten their lending in the aftermath of the financial crisis in 2008. For example, the Basel Committee on Banking Supervision (BCBS) have tightened their standard levels for bank capital, which means that corporate lending is under ever-growing pressure.
Simultaneously, larger companies are facing more global competition and they are forced to optimise their own cash flows. As a result, it's usually the smaller companies who have to deal with long payment terms. This puts SMEs in a tricky situation where even successful companies can find themselves with so much money tied in unpaid invoices that they are unable to fulfil their order backlogs effectively.
The three main forces affecting SME financing
Top-down solutions have been put out as solutions to help combat these issues, such as distributing helicopter money. However, campaigns like the Make The Banks Lend are flawed and at some point the cornucopia of benefits will run out.
The way forward are flexible marketplace solutions leveraging latest technology and where investors and SMEs can meet without middlemen. We need desperately a democratisation of finance.
What if a company could decide their financing on their own?
We at AREX want to give the financial reins back to companies. Why wait for our government or the EU's decisions when there are tools available to control and improve your financing on your own?
AREX is a fully automated marketplace that connects investors and businesses directly without a middleman. Supply and demand meet naturally. Read more about AREX here.
The fintech scene in the UK is booming and several services, including Atom Bank, TransferWise, and Monzo (formerly Mondo) have brought consumers and companies the long-awaited alternatives they have been asking for.
The UK as a next step
AREX’s marketplace is currently open in Finland, where the founders Kim Forsman and Perttu Jalkanen hail from. Thanks to the recent €3M seed funding, the marketplace will open in the UK in early 2017.
AREX's mission is to transform the way companies access short-term finance and thus bring equality and liberation into a sector that has been dominated by banks and the establishment for too long.
“Why wait for our government's decisions when there are tools available to improve your financing on your own?”
One of the most important qualities of AREX is how international it is, and not just in their plan for expansion. The founding Finnish team began developing the idea in Malta and now settled its headquarters in Barcelona, Spain. AREX’s team includes people not only from diverse backgrounds professionally such as JP Morgan, McKinsey and Skype, but also from different countries, such as Switzerland, USA and Belgium.
Backed by experienced doers and a solid belief
Forsman and Jalkanen have previously built an e-invoicing business called Maventa that oversaw €20bn in annual volume. The business was acquired by Norway-based Visma in 2013.
AREX’s lead investor, Finland’s Lifeline Ventures has, in addition to AREX, previously funded the likes of Supercell. The other main investor, the renowned London-based LocalGlobe, holds Transferwise, TweetDeck, and Citymapper in its investment portfolio, among many other successful startups.
As LocalGlobe’s Robin Klein says: “AREX are yet another example of the ambition and brilliance of execution so evident in the Nordic fin-tech sector right now. They are a team with proven pedigree and a huge mission in a market that’s poised for enormous change.”
That change starts today.
If you want to conquer your cash flow issues on your own terms and be a forerunner in the fintech scene, get early access to the marketplace now. Registration is completely free of charge.