Last week, blockchain firm Crowdz launched a private pilot of its invoice financing marketplace, the InvoiceXchange. The firm said the platform would focus on SMEs who can auction off unpaid invoices to raise finance.
In 2019, Crowdz raised $5.5 million in Series A led by Barclays Bank and BOLD Capital Partners. Seed accelerator Techstars also participated in the funding round. Now, the company has opened up registrations for the pilot of its invoice financing platform.
Using blockchain technology, the Crowdz InvoiceXchange aims to provide more liquidity for SMEs. It plans to enable access to financing without completing complicated paperwork. Additionally, the platform works as a marketplace for the invoices, and the company can select offers from banks and financers based on the rates.
“Cashflow is the biggest determining factor for a small business’ success. Research shows 64% of SMEs start with less than $10,000, meaning cashflow is often tight and needs to be managed carefully, particularly in the early days,” said Payson Johnston, CEO and Co-founder of Crowdz.
By digitalizing the accounts receivables process, Crowdz can enable both better cashflow and automated payments. Additionally, companies get better auditability with blockchain, improving their creditworthiness.
“SMEs are the backbone of our economy. Crowdz’s goal is to accelerate SME profitability by enabling access to real-time working capital, so more businesses can flourish,” added Johnston.
Founded in 2014, California-based Crowdz was part of the accelerator programs of Techstars and 500 Startups. The company has seven pending patents, and 240 companies are currently using a prototype of the Crowdz platform. Meanwhile, the startup and 20 others were selected by Oracle to work on its Chainlink blockchain project.
There’s plenty of competition in blockchain trade finance solutions. Some are startups such as dltledgers, which has processed more than $1 billion to date. Other solutions are from consortiums, including we.trade, komgo, the Letter of Credit platform (formerly Voltron), and the Marco Polo Network.