Raistone CEO Dave Skirzenski provides an overview of the financial technology company, its value proposition, and the work that it’s doing to provide more businesses access to their money, on their terms.
Q: Tell us a bit about Raistone. What’s your story, and what makes you different?
Skirzenski: It’s a very exciting time for us at Raistone — we’re a cash flow-positive company experiencing triple-digit percentage growth thanks to a continuing and growing need for working capital. The Raistone value proposition comes from our proprietary technology, which enables working capital solutions directly integrated into the software platforms being used by supply chains today, providing a frictionless experience for companies of all sizes.
The Raistone connected marketplace consists of a) buyers seeking to extend payables and improve days payable outstanding, b) suppliers seeking improved days sales outstanding and to sell more products, c) B2B networks which connect buyers and suppliers, and d) bank and non-bank financial institutions seeking to provide working capital.
Raistone electronically accesses data such as invoices, invoice approval status, remittance data, company financials, company bank accounts and historical transaction information. Through advanced machine learning, we analyse this data to create a score, and that score is then put on a curated marketplace where financial institutions can participate with Raistone to provide working capital to our clients. It’s all driven by technology – simply put, Raistone technology enables the delivery of working capital.
Q: Let’s talk more about your platform integration, because it’s a pretty compelling differentiator. What should readers know about Raistone fintech and how flexible and dynamic it can be?
Skirzenski: Raistone provides a set of flexible APIs which enable the rails to deliver various forms of working capital to their users. Enterprise-class firms deploying services from Raistone include e-invoicing providers such as SAP, ERPs such as NetSuite, virtual card issuers, payments providers, freight audit/payment companies, dynamic discounting providers and many others. Many of these companies find themselves faced with a build-versus-buy decision when it comes to developing working capital solutions. Ultimately, the vast majority of those companies have chosen Raistone to power their working capital needs.
Q: But you’re not just limited to those platforms, right?
Skirzenski: Correct. A number of companies also come to Raistone directly to utilise our products, which include receivables finance, supply chain finance, ‘buy now, pay later’, and virtual cards. At Raistone, we’re not the financier on these solutions — we create the technology to provide it. And our broad experience and flexibility give us a unique advantage in the marketplace.
I think of it like when companies such as Square, Uber and DoorDash were building out their businesses — sensibly, they turned to Marqeta as their card issuing platform, because building out their own card rails would have been cost prohibitive and challenging. Similarly, when companies of all stripes want to launch working capital products, they turn to Raistone.
Q: Can you go into a little more detail on the types of solutions Raistone provides?
Skirzenski: Our flagship offering is invoiceXcel, a proprietary cloud-based receivables, supply chain finance, ‘buy now, pay later’ and virtual cards platform that provides real-time data exchange between Raistone, our partner platforms, and financial institutions.
This enables a highly automated and secure financing process.
We also work closely with corporate card companies such as Mastercard, which have mutual goals of providing working capital to small- and medium-sized businesses. Our virtual card solution is a win-win, as it accelerates payments to suppliers, and allows large corporates to increase their rebates and simplify supplier payments.
Q: How can Raistone, along with the broader working capital marketplace, provide stability for businesses, particularly as we look toward a post-Covid economy?
Skirzenski: From an economic perspective, this is not the first time something like this has happened, nor will it be the last. It seems like every 10 years or so there is a global supply chain disruption, so in some ways, this is just business as usual. Couple the devastating effects of Covid with the regulatory changes that have constrained bank lending, and the last couple of years have been a perfect storm. This emphasises that there is no single solution that fits all business needs, particularly when it comes to finance.
Data analysis and automation clearly work, but those technologies are currently heavily applied toward the B2C space. Raistone is taking those proven advances and applying them intelligently in the B2B space.
This is a problem that almost everyone is aware of, and everyone wants to solve. From credit card companies to ERP systems to electronic invoicing providers to payment companies, everybody who touches the supply chain is saying, ‘I want to offer working capital products.’ But it’s hard to do, so the easiest and most cost-effective solution for them is to plug in Raistone’s technology and services and get up and running quickly.
Q: Raistone is creating a tradeable marketplace for working capital. Can you tell us a little bit more about that?
Skirzenski: Raistone is in a unique position, because we have the technology to process millions of invoices and score them on a marketplace, and then use that data to provide larger credit lines, higher advance rates and lower-cost products. After years of success, we have proof that the working capital facilitated through our marketplace has performed extremely well, with < 0.0002 credit losses to date on billions of dollars of working capital delivered, thanks largely to our advanced machine learning algorithms.
What we have created can be likened to a FICO credit score for B2B finance. Our unparalleled access to data from different systems allows us to develop a credit score that enables financial institutions to provide capital at lower risk. We have curated a large and growing marketplace of bank and non-bank financial institutions, providing new options for working capital that go beyond traditional banks. For some large corporates, this marketplace simply adds to their bank capacity. But for some smaller or non-investment-grade companies, our marketplace might be the only reliable and affordable access to capital they have.
The community that this working capital marketplace serves is over 4 million businesses. It’s massive. You cannot solve it with one source of capital. It needs to be a sizable marketplace, and I’m proud that Raistone has been on the forefront of providing equitable access to capital, and addressing financial needs for businesses of all sizes.
Q: What’s next for Raistone? What do you have in the pipeline for 2022, and where do you see your company going beyond that?
Skirzenski: As our curated marketplace sees tremendous growth, we continue to scale and build out our technology. Raistone-powered working capital facilities range from US$50,000 to US$500mn, and from investment-grade to distressed risk. If you’re going to address such a broad market, you need to satisfy demand in a number of ways, with solutions such as receivables finance, lines of credit, and ‘buy now, pay later’ solutions. Our data analysis, machine learning algorithms, and data integrations need to be continuously expanded to offer more products and meet the needs of the global economy. And we also need to safely and reliably provide access to more buyers of those products on our marketplace.
Thankfully, the technology industry is also providing its own solutions, such as the ability to rapidly integrate with ERPs and bank accounts, and to issue virtual cards quickly and affordably. Raistone will continue to use these cutting-edge, industry-leading products along with our proprietary algorithms to apply automation and simplify the process for businesses.
The need for and success of this approach has already been demonstrated in the consumer space, where players like Affirm or Klarna have addressed a major need for flexible financing solutions. ‘Buy now, pay later’ is a bonafide hit with consumers, and Raistone is now bringing that same working capital option to businesses.
In the months and years to come, Raistone will continue to work to simplify and expedite these processes for businesses in safe and reliable ways. This will allow us to provide more businesses access to their money, on their terms.
About Raistone: Raistone is a world leading fintech that leverages its cutting-edge technology to connect a marketplace of buyers, suppliers, business to business (B2B) platforms and financial institutions. Finance APIs from Raistone are embedded into leading B2B platforms such as ERPs, e-invoice providers, virtual card issuers and source-to-pay networks to deliver point of sale working capital finance, and deliver real-time transactional information to the marketplace.
About Dave Skirzenski: Dave has more than 20 years of experience building and operating fintechs around the world. From IBM to SAP, he has managed core development teams that both launched and innovated software platforms. He previously served as North American Head of Supplier Finance at Citibank, and is currently the CEO of Raistone.