Fueled by a new round of funding, Tradeshift plans to keep changing the way businesses make and receive payments through an open, cloud-based platform that connects a half million companies.
Tradeshift, which currently connects 500,000 companies across 190 countries and adds more than 10,000 companies each month, hopes to boost that performance via a Series C funding of $75 million from Singapore's Scentan Ventures that boosted Tradeshift's funding total to $112 million. Tradeshift plans to use the money for expansion in the U.S. and Europe while also "jump-starting" new business in Japan. The company operates in the business payments market, which has lagged consumer payments in embracing automation, attracting companies such as BillTrust, Bill.com and Fiserv.
As a funding partner, Scentan Ventures will provide product development, sales, marketing and service rights for the Tradeshift platform in Japan. Scentan Ventures has a clear understanding of Tradeshift's vision to connect all businesses on its cloud-based platform, says Christian Lanng, Tradeshift's CEO and co-founder.
It is in the DNA of our company to do things organically and on a global scale, from developing software to developing our business, Lanng says. We spent a lot of time determining who the best partner would be to move Tradeshift to the next level, not just with regard to our funding, but also our global expansion strategy."
Tradeshift, which is based in San Francisco and has offices in London, Tokyo and Copenhagen, offers an Early Payments system that allows suppliers to get paid immediately after a customer accepts an invoice through Tradeshift, rather than waiting for what is often 30 to 90 days for payment.
"Anyone using the Tradeshift platform might get paid faster just by getting rid of paper-based processes and improving the communication they have with their customers," Lanng says. "On top of that, our Early Payments program can get companies paid faster by their customers, either directly or through a third-party bank or other funding source."
Lanng founded Tradeshift in 2010 after his successful creation and deployment of EasyTrade in Denmark, a system for the Danish government to receive and process invoices electronically.
Having grown up as the Internet was coming of age, Lanng couldn't understand why older systems charged a fee for invoicing, forcing businesses "to pay simply to send a message [invoice] to tell someone they owed you money."
Such a notion led to the creation of the Tradeshift platform, initially built for suppliers with many invoices and payments. But businesses of any size can benefit from the system, Lanng says.
"We deliver free electronic invoicing, faster payments, and predictable cash flow," Lanng adds. "Small to medium size businesses can track invoice status from the moment they send an invoice until its paid."
As such, Tradeshift became a significant disruptor in the payments industry, says Gareth Lodge, a London-based industry analyst with Celent.
"They were the first to use cloud and first to change the business model," Lodge says.
Tradeshift started out as an e-invoicing company and "progressively expanded to offer greater levels of functionality, including dynamic discount invoicing tied to the credit rating of the buyer," Lodge adds.
Businesses and suppliers can reap big benefits from a company like Tradeshift, Lodge says. "The European Commission has estimated that if all European businesses used e-invoicing and similar services they would save 64 billion euros a year," he adds.
Tradeshift's cloud-based business management platform operates through the Web on a desktop computer or mobile devices. In addition, the cloud-based format allows Tradeshift to link companies together for easier collaboration and transactions.
"For some clients, it is a key point that Tradeshift has a global supplier network that supports a long list of currencies and languages," Lanng says. "It also has features that enable compliance with government regulations around the world."
Tradeshift is not the only e-invoicing supplier targeting expansion, especially in the U.S. market, Lodge says.
But Tradeshift operates on solid footing, Lodge says. "The team that built the Tradeshift platform went on to develop an e-invoicing platform used by 14 European governments, all fully interoperable with Tradeshift."
In addition, Tradeshift has always had strong investors, Lodge says, noting that a big and early investor was Morten Lund, who also was an early investor in Skype.