LICUOS selected as Finalist for Next Bank Madrid – Innotribe Startup Disrupt

LICUOS is pleased to announce that we have been selected as a finalist of Next Bank MadridInnotribe Startup Disrupt, honouring the company as one of the most promising financial technology and financial services startups in Spain and Portugal. On 25th June 2013, LICUOS will compete against 8 other startups to secure a place as a demo slot at the Sibos conference in Dubai in September.

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This year’s finalists are:

The event is supported by Wayra, a Latin American and European start-up funding firm created by Telefónica, as well as the IE Business School in Madrid. “The idea is to unlock some of the potential of Spain in financial services,” said Andrés Fontao, partner at Next Bank Madrid. “Spain has been the benchmark for innovation in financial services; the country leads in mobile payments. In Spain, anyone can start a financial services firm in their garage. That’s a threat to the traditional players – and the banks are trying to get as close as they can to the action.”

Fermín Bueno, partner at Next Bank Madrid, said: “With its strong banking sector, Madrid has always been an important global hub for innovation in financial services. Spanish retail banks were the first to introduce mobile banking to its clients in the early 2000s. What few know is that Madrid also has a very vibrant scene of fintech startups. We want to support the startups that have the potential to transform the entire financial services industry.”

According to Matteo Rizzi, co-founder at Innotribe, “when we did the Innotribe Start-up Challenge, we found that only two of the 250 applicants were from the Spanish/Portuguese speaking countries. Some 60 firms have applied for this Next Bank Madrid event. If we can ensure the quality of the start-ups and the process, the plan is to do five more events in Latin America.”

Iker de los Ríos, CEO at LICUOS said “one of these Spanish speaking startups that applied to the Innotribe Start-up Challenge was LICUOS which was selected as a semi-finalist of the Innotribe Startup Challenge.” LICUOS is a global business-to-business payment platform where businesses can compensate and pay their commercial debts. The platform provides netting, payment and funding services for accounts receivable and payable for businesses, allowing them to reduce their dependence on the traditional banking system alternatives so that they can significantly improve their working capital and cash flow management. By applying our solution, businesses from all economic sectors and sizes, including public administration and nonprofit, will achieve an important reduction in their funding needs and credit risk exposure.

We’d like to thank Next Bank Madrid, SWIFT Innotribe, BBVA, Accenture and ThoughtWorks and the other Next Bank Madrid Partners for making the event possible.

For further information about Next Bank Madrid, please visit: http://www.nextbankmadrid.com/ or follow @NextBankMadrid on Twitter.

For more information in English about this event, check out “Disruptive” Spanish and Portuguese start-ups to showcase talent in Madrid” by Elliott Holley, senior staff writer on Banking Technology at http://www.bankingtech.com.

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LICUOS and collaborative finance

Collaborative finance is a category of financial transaction that occurs directly between individuals without the intermediation of a traditional financial institution. This new way to manage informal financial transactions has been enabled by advances in social media and peer-to-peer, business-to-business and even peer-to-business on line platforms.

However, collaborative finance is just a category inside collaborative economics that refers to organizations and initiatives that value cooperation, ecological sustainability and social justice.  These include community supported agriculture, collaborative consumption, and transportation solutions among many others.

Before the industrial revolution, the typical standard of living had changed little through history. The industrial revolution brought sustained economic growth for the first time to the developed nations. But ecological constraints and limited human needs threaten to stop growth. We need to ask when growth should end because people have enough and/or because we have reached our full production potential.

The efficiency factor is an important ingredient of economic growth. The economy must use its resources in the least costly way (productive efficiency) to produce the specific mix of goods and services that maximizes people’s well-being (allocative efficiency). The efficiency factor is the capacity of an economy to combine resources effectively to achieve growth of real output that the supply factors of growth make possible. As Albert Cañigueral, Spain & LatAm Connector at OUISHARE, said: “we must ensure that what we produce as a society flows more and faster because we cannot produce more”.

Collaborative economics enables people to rent, share or swap goods and services. Promoting values such as integrity and solidarity, this new model has extended to every social and economic field including companies’ organization, culture, manufacturing or finance. In fact, TIME Magazine recently called Collaborative Consumption one of the “10 Ideas that will change the world”. One of the main factors enhancing the sharing economy is the technological breakthroughs we are attending to. “This technology has created the needed efficiency and trust to connect thousands of people” remembers Rachel Botsman, one of the most influential writers about collaborative consumption, and adds “the currency of the new collaborative economy is trust”.

During these years of economic crisis and instabilities, the lack of trust in the financial markets and banks has become evident. As Philippe Gelis, CEO at Kantox, said: “it seems that companies feel much more comfortable trading FX between themselves than with banks”. Trust is one of the principles of collaborative economics and individuals and companies trust more unknown people than banks. This is breaking the existing dependency on banks.

We describe below various categories and examples of initiatives of collaborative finance. We selected an example per category but there are many other initiatives in each group with different characteristics, impact and business models.

  • Peer-to-peer lending and crowdfunding platforms. Zopa is a UK-based company providing an online money exchange service, allowing people who have money to lend it to those who wish to borrow, instead of using savings accounts and loan applications at traditional banks.
  • Virtual currencies. Bitcoin is a cryptocurrency first described in a 2008 paper by pseudonymous developer Satoshi Nakamoto, who called it a peer-to-peer, electronic cash system. Bitcoin creation and transfer is based on an open source cryptographic protocol and is not managed by any central authority. Bitcoins can be transferred through a computer or smartphone without an intermediate financial institution.
  • Time banks and bartering platforms. Timebanking.org connects 250 timebanks across the UK. Timebanking is a means of exchange used to organize people and organizations around a purpose, where time is the principal currency.  For every hour participants ‘deposit’ in a timebank, perhaps by giving practical help and support to others, they are able to ‘withdraw’ equivalent support in time when they themselves are in need. In each case the participant decides what they can offer.
  • Peer-to-peer trading platforms. Kantox is a web platform which allows companies to directly find counterparties (others companies) to match and net their future cash-flows in foreign currencies, at an agreed fixed exchange rate (mid-market rate), and thus hedge their foreign exchange risk. By netting cash-flows in foreign currencies without the intermediation of banks, Kantox is able to offer companies a fairly priced FX hedging solution which does not require any margin deposit nor credit line.
  • Multilateral netting platforms. LICUOS is a global B2B payment platform where businesses can compensate and pay their commercial debts. The platform provides netting, payment and funding services for accounts receivable and payable for businesses, allowing them to reduce their dependence on the traditional banking system alternatives so that they can significantly improve their working capital and cash flow management.

LICUOS is a disruptive initiative in the collaborative finance spectrum where companies can compensate and pay their commercial debts and provides them with a non-banking liquidity fund offering some services included in other categories such as “the peer-to-peer lending and crowdfunding platforms” category. On the one hand, the netting processes enable companies to reduce the funding needs as their working capital is reduced and provides them with a non-banking liquidity channel that allows buyers to borrow money, to early pay their accounts payable. On the other hand, the LICUOS patent pending technology generates multilateral payment proposals for the companies, reducing the amount of debts in the chain and allowing for an optimized and minimized movement of cash.

Collaborative economics and finance are not new, but the current economic crisis, along with technological advances, has boosted its growth. Following a clear trend of banking disintermediation, a huge number of peer-to-peer electronic platforms have emerged in every area, including finance.

LICUOS selected as Semi-Finalist for Innotribe Startup Challenge

LICUOS is pleased to announce that we have been selected as a semi-finalist of the Innotribe Startup Challenge, honouring the company as one of the most promising financial technology and financial services startups. On 13th June 2013, LICUOS will compete against 14 other startups and innovators at Innotribe Startup Challenge Showcase in New York to secure a place as a finalist for the $50,000 grand prize and continuous exposure to investors and financial institutions via the SWIFT global community.

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Innotribe, SWIFT’s initiative to enable collaborative innovation in financial services, and a panel of industry experts selected 15 semi-finalists from hundreds of applications to enter the Challenge. LICUOS will pitch its solution to a panel of the financial industry’s leading angels, VC’s and decision makers. Innotribe brings together strategists, business and technology leaders, trend-setters and trend-watchers, and thinkers interested in taking action and shaping the future.

LICUOS is a global business-to-business payment platform where businesses can compensate and pay their commercial debts. The platform provides netting, payment and funding services for accounts receivable and payable for businesses, allowing them to reduce their dependence on the traditional banking system alternatives so that they can significantly improve their working capital and cash flow management. By applying our solution, businesses from all economic sectors and sizes, including public administration and nonprofit, will achieve an important reduction in their funding needs and credit risk exposure.

Iker de los Ríos, CEO at LICUOS said “we’re proud to be recognized as one of the leading financial technology innovators by Innotribe, and believe this award will help us extend the reach and value of our community and become the de-facto industry standard for business-to-business netting and payment services”.

The winners of the Innotribe Startup Challenge Showcase in New York will receive the opportunity to attend SIBOS in Dubai where they will compete against other finalists from the London and Singapore Challenge Showcases.

Matteo Rizzi, Co-founder of Innotribe, says “I’m delighted to announce LICUOS as a semi-finalist and look forward to discovering more about the business. This year’s semi-finalists have assessed the developments and trends in the region and have identified opportunities in the market. The entrants have each demonstrated a forward-thinking and innovative approach to the financial sector and have developed start-up businesses which could have profound impacts on the future of the industry. I’m extremely excited to give LICUOS the opportunity to pitch its ideas to some of the top decision makers in the industry”.

We’d like to thank SWIFT Innotribe, Invest NI, HP, Level39, Sberbank and the other Innotribe Challenge Partners for making the Innotribe Startup Challenge possible.

For further information about the Innotribe Startup Challenge, please visit: http://innotribestartup.com/ or follow @innotribe on Twitter.

About Innotribe

Launched in 2009, Innotribe is SWIFT’s initiative to enable collaborative innovation in financial services.  Innotribe presents an energising mix of education, new perspectives, collaboration, facilitation and incubation to professionals and entrepreneurs who are willing to drive change within their industry. It fosters creative thinking in financial services, through debating the options (at Innotribe events) and supporting the creation of innovative new solutions (through the Incubator, Startup Challenge and Proof of Concepts (POCs). It is through this approach, the Innotribe team at SWIFT is able to generate a platform that enables innovation across SWIFT and the financial community. For more information, please visit http://www.innotribe.com/.

About SWIFT

SWIFT is a member-owned cooperative that provides the communications platform, products and services to connect more than 10,000 financial institutions and corporations in 210 countries. SWIFT enables its users to exchange automated, standardised financial information securely and reliably, thereby lowering costs, reducing operational risk and eliminating operational inefficiencies. SWIFT also brings the financial community together to work collaboratively to shape market practice, define standards and debate issues of mutual interest.

For more information, please visit www.swift.com or follow us on Twitter: @swiftcommunity and Linkedin: SWIFT.

FinovateSpring 2013 demo video

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We’re excited to announce that LICUOS’ demo from FinovateSpring 2013 is now live!

LICUOS was chosen as one of the 72 companies to showcase the newest and most innovative financial and banking technologies. We were given 7 minutes to give a live, real-time demo to represent our core technology.

Watch LICUOS’ CEO, Iker de los Rios, and Co-founder and Board Member, Lander Gonzalez, demonstrating the features and benefits of LICUOS´ services for businesses: Netting, Payments and Funding.

http://www.finovate.com/spring13vid/videos/LICUOS.mov

Finovate_map

LICUOS, Finovate & Blogs.

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LICUOS was selected to demo at FinovateSpring in San Francisco. FinovateSpring is a demo-based conference for innovative startups and established companies in the fields of banking and financial technology. This May’s presenters included some of the biggest names in financial-technology, including Fiserv, MoneyDesktop, FIS, and TSYS. Each company gets 7 minutes and there is no PowerPoint allowed. Eric Mattson, CEO of Finovate said “this was the biggest Finovate ever”.

LICUOS would like to thank The Finovate Group and its Partners for making the FinovateSpring event possible and the four contributors that covered all 72 demos. Thanks to Erin McCune, William Mills III, Phillip Ryan and David Penn.

You will find below and attached these contributions:

Finovate Blog: LICUOS Launches Secure, B2B Payables, Receivables Processing Solution by David Penn. http://finovate.com/2013/05/licuos-launches-secure-b2b-payables-receivables-processing-solution.html

LICUOS is demoing its core technology: a unique proprietary and patent-pending technology that enables an efficient and highly secure processing of accounts payable and receivable transactions, 24/7 and in real-time, to deliver the best financial optimization and user experience. Our algorithms automatically identify and generate the most convenient and efficient netting, payment and funding proposals. They manage all of the associated transactions that allow businesses to significantly reduce or eliminate their commercial debts. LICUOS gives businesses full control and visibility into the payment process and allows them to easily communicate and negotiate with their business partners.

Bank Innovation: Finovate Day 2 Morning Recap and Ratings by Philip Ryan. http://bankinnovation.net/2013/05/finovate-day-2-morning-recap/?utm_source=feedblitz&utm_medium=FeedBlitzEmail&utm_content=646536&utm_campaign=0

LICUOS is an open payment platform for businesses to reduce debt rather than just pay them. The company hails from Spain where they know a thing or two about corporate debt. Invoices are aggregated into the site and algorithms determine the optimal way to pay. The platform also allows payments netting services and 200 European companies have requested funding its lending platform. It’s not just about reducing fees and improving cashflow — the company is a wide-open payments platform.

  • Cool Factor: 4/5
  • I Want It: 3/5
  • Revenue Potential: 3/5

Payments Views: Live Blogging Finovate Spring 2013 San Francisco by Erin McCune. http://paymentsviews.com/2013/05/14/live-blogging-finovate-spring-2013-san-francisco/?utm_source=feedblitz&utm_medium=FeedBlitzEmail&utm_content=646536&utm_campaign=0

  • First payment platform to help businesses reduce debt, from Spain, where business debt is a huge issue
  • Businesses from all industries, of all sizes
  • Netting is core feature – enabling
  • Payments – both traditional supplier payments, from buyer to its vendors, on Licuos open payment platform
  • Funding – means of obtaining financing from non-banking third parties
  • Dashboard shows over all position, drill down to individual invoices – integrated with ERP/Accounting or invoicing system
  • Algorithmic suggestions of the best means to make payments
  • Using netting to pay off accounts receivable to pay off accounts payable (what is owed to you to pay what you owe). Enables customers to manage cash flow more effectively
  • Can fund payment via wire, or credit card, or gain supplier financing via a third party – corporate investors and family offices investing in fund

William Mills Agency Live Blog: FinovateSpring 2013 San Francisco by William Mills III. http://www.williammills.com/blog/live-blog-finovatespring-2013-day-two/?utm_source=feedblitz&utm_medium=FeedBlitzEmail&utm_content=646536&utm_campaign=0

From Spain, the global B2B payment platform. At first glance it looks like PayPal for businesses-to-businesss transactions. From their web site: LICUOS is the global B2B payment platform where businesses can compensate and pay their debts.

Web-based. Showing validated invoices in the system. “Open payment platform” I think it works and the demo looks good but who is the driver of using this system? The CFO of a SMB? How do they make money? I’m guessing subscriptions or white label from FI’s or other parters. “more than a payments platform”

This seems like something that Intuit or other company should resell as an option for QuickBooks.

Changing the Supply Chain Finance paradigm

Supply Chain Finance (SCF) refers to the set of solutions for financing specific goods as they move from origin to destination along the supply chain. SCF is one of the different methods used by companies to manage their working capital. In general, we can find three principal groups of solutions:

  • Negotiation of payment conditions
  • Financial institution services
  • Collaborative solutions

Inside each group, there are several specific methods but this range of solutions tries to give an answer to one of the troublesome areas explained in one of our previous post, the financing of working capital. As the access to banking credit is tighter than ever before and financing costs are rising, companies have begun to look towards other alternatives where the Supply Chain is a key element. In fact, the problem of working capital financing is not unique to crisis periods, but during these tough times companies have focused more than ever on managing their working capital needs.

One of the results of this focus has been the emergence of SCF solutions, with the overall goal of optimizing the working capital along the whole of the value chain, making it stronger and providing an alternative source of liquidity to all its members.

The first solution to address the issue of working capital funding was negotiation among different parties, with methods, such as deferred payment strategies, where the only goal was to advance receivables and delay payments. Overall payment due date negotiation between businesses is a zero sum game. Nevertheless, due to power and strength differences, the negotiations resulted always in favor of one of them, which impaired the smaller members of the chain with unfavorable payment conditions.

As a result of these problems, the solutions of intermediation proposed by Financial Institutions emerged. Factoring and Reverse factoring are just some examples. Both partially solve the problem of bargaining strength but add high costs in terms of discounting fees and interest rates. Traditionally, these solutions have been used by small and medium size enterprises to try to solve the consequences of the payment conditions imposed by larger players but, nowadays even high-rated companies are making use of them.

Exhibit 1. Financial institution services: factoring description.factoring

Nevertheless, these intermediation solutions create a huge dependency on the banking system. This has then turned into a significant area of concern for both Governments and large buyers, above all, among those belonging to sectors where the guaranteed smooth operation of the whole of the supply chain is essential, such as the food, automobile or chemical industries.

In this environment, highly characterized by the integration of the supply chains, collaborative solutions have started to grow in order to enhance the negotiation and collaboration between suppliers and buyers. Currently, only a small percentage of companies are using SCF techniques, but more than half have plans or are investigating options to improve supply chain finance techniques. Slow adoption of SCF programs does not depend on lack of demand from businesses but on the resistance of the Banking System to change the way it operates.

However, some banks are putting their factoring business under the wider Supply Chain Finance “umbrella”, trying to move from a traditional product-centric approach to a client-centric strategy but client-centricity is not about naming but about solving the customer problem. Banks reluctance to adapt their services to the new needs and offerings is causing the rise of solutions that promote the investment of available liquidity in one’s own supply chain, accelerating payments and cash collections, so that early payment discounts are seen as an asset allocation alternative with higher profitability and less risk than those offered by banks. This collaboration creates a win-win relationship for members of the chain, increasing their combined financial strength.

Given the complexities of modern financing and business to business payment techniques, invoicing including invoice automation and discount management initiatives need a framework to ensure that programs are approached on a strategic basis which bridges the supply chain, purchasing, accounts payable and finance organizations. These are some of the challenges that solution providers offering SCF and dynamic payables discounting solutions should face.

Exhibit 2. Early payment platform (example) description.dynamic_disc

In addition to this, there are other alternatives that go one step further, leveraging not only the supply chain itself but also the network that each individual company creates from its own daily operations in order to find potential netting cycles that can compensate commercial debts.

Through this process, companies are able to minimize the number and volume of cash transactions, and hence, the banking fees associated with the same transactions. These solutions allow businesses to reduce their dependence on the traditional banking system alternatives and at the same time significantly improve their working capital and cash flow management. By applying these techniques, businesses achieve an important reduction in their funding needs and credit risk exposure.

LICUOS is one of the few companies capable of offering this degree of innovative and disruptive processing. Throughout its innovative patent pending technology solution, LICUOS enables an efficient and highly secure processing of accounts payable and receivable transactions, 24/7 and in real-time, to deliver the best possible financial optimization and user experience. Furthermore, LICUOS gives businesses full control and visibility into the payment process and allows them to easily communicate and negotiate with their business partners.