Taking stock of the fintech sector with MarketInvoice boss Anil Stocker
From boardrooms to dining rooms, bank bashing is one topic of conversation that riles up most British entrepreneurs.
But how many people actually bother disrupting the sector instead of complaining?
Enter Anil Stocker and co-founder Ilya Kondrashov of peer-to-peer lending platform MarketInvoice.
Their London-based company just recently celebrated providing £500m worth of finance to UK businesses last year, and hopes to reach £1bn during 2016.
In August last year, the fintech firm secured a £6m investment to accelerate its growth.
We caught up with Stocker to take stock of MarketInvoice’s growth, London’s tech scene and the possibility of the UK producing the next billion-dollar tech company.
In 2010 I was travelling around the UK speaking to business owners with the idea of taking equity in a handful of businesses. But when I spoke to the owners it was clear that they didn’t need equity finance, their biggest issue was cashflow, and no truly great solution for cashflow problems was available. I came across the dusty old factoring industry and found it riddled with complexities. I figured there must be way to offer invoice finance without the heavy fees and lock-ins that put growing businesses off.
We’re going to use the funding to accelerate our growth. We spent a few years proving our model works, and now we’re ready to put the foot down. We’ve focused specifically on hiring in tech, product and marketing - if we get these three things right, we know we’ll be in great shape. At the beginning of last year, we were a team of 40, and now we’re closing in on 100. When the team scales, the product and the model grows with it. It’s a constant refining process, ironing out the creases and offering a service that only gets better.
The banks have always been our competitors from day one. Business owners have been woefully under-served by the high-street lenders in recent years. Not only in terms of customer experience, but also accessibility – simply getting a loan, let alone the amount you need, has become much harder. Business lending was deemed too risky post-crisis. Whilst bank lending is now finally beginning to improve thanks to heavy government backing, the way in which the banks operate is still completely out of touch with other sectors. Staying ahead in terms of product isn’t a challenge, but we can’t allow that to soften us up, we have to keep innovating! Where we need to catch up with the banks is on awareness. A lot of businesses, when they need finance, think of their bank and nothing else, that’s a culture we have to break.
The problem with getting started in financial services is that you’re asking the customer to place a huge amount of trust in you and your product. Simply convincing our very first business that we could provide them with the finance they needed was very difficult. No-one wants to be the first person to take the plunge. We knew we could help and believed in the model, but the fact we had no evidence made it a difficult sell. In the end, someone decided to take a chance. Their feedback was so positive that others gave it a try, and everything snowballed from there.
We celebrated funding £500m worth of finance to UK businesses last year, and we hope to reach £1bn during 2016. But whilst the funding milestones are important, I think they’re quite arbitrary in terms of our overall goal of offering fast, flexible funding to all business owners. To our customer – £1bn, £2bn, £3bn – it loses meaning.
I’m really looking forward to our 100th hire – looking back on where we were in 2011, to think of the team now – it’s a real feeling of achievement.
We’re based just opposite Holborn station as there’s a definite sense of collaboration and community with London’s Fintech scene in the area. There’s always a meet-up, a demo, a pitch – what we’re seeing is a growing population of Londoners who really are interested in these types of businesses. Not only as a place to work, but as adopters of all this new technology which is emerging. We’ve found the businesses in the capital are pioneers for services like ours, ready and willing to take a chance on innovation. Last year, tech businesses in the capital raised over £50m through our platform. It’s great that these entrepreneurs, innovators in their own respective fields, are seeking out that very same innovation in their finances, and how they fund their business.
We have 90 full-time staff and our 2015 revenue was over £4m.
There’s so many! I think the digital banks are exciting, and I’m intrigued to see how they develop. We had the founder of Mondo [a finance company] in the office last week, and I know some of our team have been enjoying using their Alpha Card. I’ve also been following Black Swan, a city-based tech company harnessing the true power of big data. They are actually using MarketInvoice for funding, and were recently named the fastest growing start-up in the UK.
There’s a certainly a ‘conversion’ issue – not just in the UK, but Europe also. London has this incredible ability to produce innovative businesses, many of which claim to sit in the unicorn bracket. But as of yet, none of them have really pushed into that upper echelon of generation-defining companies. Look at Silicon Valley. Whilst London saw record investment of over $3bn into tech last year, this figure is still dwarfed by the vast venture reserves poured into West coast talent. This is part of the problem. But I think there’s a more fundamental issue within business culture in the UK – entrepreneurs lack that next gear of ambition. This is not to say that London lacks young minds driven to succeed. But few of our successful business owners are willing to take the risk of international scaling. The Valley has come to embody this ‘no risk, no reward, no ceilings’ attitude. However, I’m certain that if there’s in anywhere in the world that can match that Valley atmosphere soon, it’s London.
Have a mission from day one and never lose sight of it, even five, 10 years down the line. The more ambitious you are the better. Always hold onto that one goal that made you want to start a business and keep it in mind with every decision you make. There’s a quote from Ronald Cohen’s autobiography that always stuck with me – “start young, think big, stick with it.”
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