Image credits: AREX
SMEs (Small and Medium Enterprises) are vital for employment and job creation across the world. It is crucial to have solid cash management practise, particularly the cash flow, to ensure the sustainability and profitability of the business.
Ironically, cash flow proves to be an existential threat for the majority of SMEs. It’s worth mentioning that the global pandemic has put immense pressure on SME businesses, with many suffering from slow or frozen payments.
Recently, the winners of the 2021 Future Hamburg Award were announced.
At present, there is a broad range of solutions that SMEs can execute to avoid late payments and cash flow problems before they start threatening the business.
Meet AREX Markets, a Dublin-based fintech startup that drives financing costs down for SMEs and enables them to get access to cash quickly.
Raised €8.8M
Recently, the Irish company has secured €8.8M funding in a Series A round, co-led by Mosaic Ventures and LocalGlobe. Others including, Lifeline Ventures and angel investor Richard Laxer, former CEO of GE Capital, also participated. Notably, AREX raised €3M funding in Seed round in 2016. According to the company, with this funding, AREX has launched in the UK and Spain.
About Investors
Based out of London, Mosaic Ventures is a Silicon Valley-style venture focused on Series A. To date, the company has invested in over 70 companies across 12 countries that together have created over $400 billion of value.
Local Globe is yet another VC firm that focuses on seed and impact investments. The VC has so far invested in companies like Citymapper, Improbable, Lovefilm, Moo, Tweetdeck, Transferwise, and Zoopla.
Unlocks trapped cash
Founded by Hannu Krosing, Perttu Jalkanen, and Kim Forsman, AREX Markets was born in 2014 out of an opportunity for technology to disrupt the multi-trillion SME financing market.
AREX helps SMEs get paid faster by unlocking cash trapped in their unpaid invoices. The company is on a mission to drive financing costs down so SMEs can retain more of their money.
The company has witnessed a 20 per cent increase in growth month-on-month during 2021.
As per the company’s claims, more than 65K invoices were financed through the platform so far, out of which 92.4 per cent of the SMEs received funding on the same day.
Allows SMEs to take control
Through its platform, AREX helps SMEs take control through invoice financing by bridging the gap without eye-watering interest rates.
The Irish company offers an alternative to traditional invoice financing, facilitating a live, algorithm-based trade that enables SMEs to get cash trapped in their debtor book.
Further, it also allows professional investors to invest in SME assets directly without prohibitive transaction costs.
Exchange-Traded Receivables
AREX Markets’ first product was an invoice financing solution, where invoices are converted into a tradable asset class called Exchange Traded Receivables (ETRs).
The ETRs are then sold on the AREX platform where a single ETR can be purchased by multiple investors using algorithm-based trading bots.
Airto Vienola, CEO of AREX, comments, “Our goal is to level the playing field for SME financing. Banks remain reluctant to lend to SMEs, often leading to them feeling trapped when it comes to their business finances. We listen carefully to our partners’ and customers’ requirements and liberate the liquidity within their business. We’re already seeing a sharp rise in demand for this service and a willingness for business owners to finally reappraise their financing options, which have been so unfavourable for so long. Closing the Series A raise with such supportive and significant partners on board is a major milestone in AREX’s growth and continued expansion.”
