17 Feb The Alternative Financing Landscape
A Report Of Our Latest Meet-up
Most regard Friday the 13th as a day of bad luck, but we at Holland Fintech think unlike the masses and thought it was actually a good day to organize an educational and entertaining event about alternative financing options for start-ups. Banks are not so keen on initiating loans anymore, let alone high-risk venture capital. But start-ups need cash in order to grow, so what are then the options? We argue the answer is to be found in a rapidly growing trend called alternative financing. So we invited an interesting mix of entrepreneurs, investors, consultants, lawyers and other people active in the fintech space to join our event, discuss and learn more from each other. At approximately 16:00 the room was packed enabling Don Ginsel, founder of Holland Fintech, to give everybody a warm welcome.
The first speaker on this sunny Friday afternoon was our host Schuberg Philis, an innovative business technology company situated near Schiphol Airport. Their cloud director Arjan Eriks kicked off by elaborating on the success story that is Schuberg Philips. They offer a cloud-based IT environment that guarantees a 100% uptime, which is a very innovative business proposal. Founded in 2001, the company enjoyed a steep growth throughout the years as more and more companies, were forced to rethink and re-organize their complex IT structures. A secure and timely IT infrastructure is very important, as was emphasized by a thrilling anecdote by Arjan on a near-breach of security which could have affected half of the country’s household.
After that, Don Ginsel shared his thoughts on the alternative financing landscape. The leaders in the pack are the crowdfunding platforms. Globally, volume on these platforms surpassed the $10 billion threshold already, and is projected to grow to $93 billion by 2025. In the Netherlands about 30 platforms are registered at AFM, of which geldvoorelkaar.nl is the biggest. In countries like the UK and the US the numbers are much bigger, with newcomer on Wall Street Lendingclub.com as king of the hill. But all countries experience a similar pattern: rapid growth.
That shouldn’t be a surprise. A big part of the Western economies still rely on banking lending. But although small and medium enterprises (SME’s) make up for two-thirds of the labor market, they have a hard time nowadays obtaining a loan from the banking industry. We believe alternative financing helps to fill this gap. That does not mean that banks do not play a role. They can cooperate and work jointly with innovative start-ups to change the ways of traditional banking. Vice versa, crowdfunding platforms could also learn from the banks with regards to risk management, crafting exit scenarios and long-term outlooks. The government also can play a role; not by being the financier, but by creating a transparent low tax environment, fair game for everybody and rolling out hassle-free landing services for start-ups.
We invited 4 fresh start-ups to make their story known: Sparkholder, Trefi Finance, InvestorBase and Oneplanetcrowd.
Sparkholder presents an innovative SaaS solution for those who want fully automated and up-to-date insight in SME companies. The idea is that banks and alternative financing channels like crowdfunding platforms, business angels and credit unions need information, but struggle getting the right information. Sparkholder is able to easily provide the sought-after knowledge, empowering potential investors to make informed decisions.
Trefi Finance is a fully web based solution that provides services like invoicing, invoice approval, dispute handling, payment, legal collection and last but not least tight financial risk management procedures. They started last year in the Netherlands, and from this year on they are available for all Dutch SME’s in the B2B segment. Their solution is highly scalable, so there’s arguably an enormous upside for this fintech start-up.
Then InvestorBase came on stage. This start-up has yet be launched, so that made this one a little bit different from the others. Their innovation is to make the viewpoint of the entrepreneur as the starting point, rather than the potential investor, and then facilitate the entrepreneur completely in the funding process. That should speed up things and make the return on investment higher compared to the investors-only viewpoint.
Oneplanetcrowd was the last one on stage. This is a crownfunding platform for companies and projects with a sustainable and social impact. They have been very successful so far, and have plans to penetrate other markets than just the Netherlands en Germany.
The meet-up ended with a cozy drink & snacks event we in the Netherlands call a ‘borrel’. Make sure you join our next meet-up!
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