HSBC and fintech Tradeshift have launched a joint venture to finance businesses that use e-commerce marketplaces, as the bank bets on growth in embedded finance.

The new company, branded as SemFi by HSBC, is three-quarters owned by the UK-headquartered lender, with 25% being held by Tradeshift.

SemFi will be embedded in B2B e-commerce marketplaces, beginning with Tradeshift, enabling sellers to speed up payment times by having their invoices paid early by HSBC or other banks in exchange for a discount.

The initiative is the latest effort to originate trade finance business on increasingly popular digital marketplaces for goods, a shift that has been spearheaded by tech companies in Asia.

HSBC believes embedding invoice financing products in B2B marketplaces will allow the bank to offer dynamic and “competitive” credit limits to a larger range of customers by analysing the seller’s transaction history and plugging directly into their accounting software, SemFi chief executive Vinay Mendonca told reporters at a launch event on October 3.

Mendonca cited a McKinsey estimate that 25% of SME and retail lending revenues could come from embedded finance channels by 2030, estimating revenue in Europe alone to be €100bn per year by 2030.

“SemFi by HSBC aims to deliver such embedded capabilities to help businesses grow,” Mendonca says in a HSBC press release. “It will seek to bring the best of both worlds to our business customers and e-commerce partners; a startup technology mindset coupled with the global scale and expertise, of an international bank.”

Tradeshift CEO James Stirk said SemFi is “truly a world first”.

SemFi is designed to be used by other banks and platforms, with the joint venture company receiving a fee based on revenues that lenders generate from using the product.

The joint venture – first mooted last year when HSBC announced a US$35mn investment in London-based Tradeshift – is now live for UK customers.

At first, SemFi is only available to companies trading within the UK, or exporting from the country. Mendonca said that the bank plans to begin making it available for cross-border transactions in the middle of 2025, but that transactions will only be possible in countries where HSBC operates.

The bank plans to help manage the risk of cross-border transactions by bringing trade credit insurers onto the platform, Mendonca said, adding that he is currently in talks with insurance providers and brokers.

Alongside Mendonca, fellow HSBC banker Shehan Silva has also joined SemFi as chief operating officer.

Other lenders have also tried to capitalise on the expected opportunities from embedded finance. Last year Santander, Allianz Trade and B2B platform Two rolled out a buy-now-pay-later product for multinationals, and in June working capital provider Muse announced a similar product embedded in accounting software Xero.