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Upward flowa French startup we’ve been covering for a long time, was originally focused on managing outstanding invoices. The company is now announcing a shift in its strategy to become a B2B payment platform with its own payment gateway to complement its accounts receivable automation solution.
Cash collection startup Upflow also wants to handle B2B payments
Like many SaaS products, Upflow started by building a central hub tailored to one function in particular: CFOs. Through Upflow dashboards, CFOs and finance teams can see all of their company’s invoices, track payments, communicate with team members, and send reminders to customers.
It integrates well with other financial tools and services to automatically import data from third-party services. A tool like Upflow can be especially important as many tech companies struggle to raise their next funding round and want to improve their cash balance.
But this was just the first step in a larger road map.
“Basically, my vision has always been that the real problem is payment methods,” Upflow co-founder and CEO Alexandre Luisi (pictured above) told TechCrunch. “Today, when you pay in a store, you pay with your phone. When you pay for your Spotify subscription or your Amazon subscription, you don’t even think about how to pay.
“But when you look at B2B payments, the way you pay today hasn’t changed in the last 50 years. And for us, that’s why people have late payments. The thing I’m really trying to fight is the idea that late payments are associated with bad payers.”
According to him, about 90% of B2B payments still take place offline in the United States. Most are still paper checks. In Europe, the situation is different, as companies have adopted bank transfers. But Luisi said the transfers are “completely unregulated and require manual reconciliation.”
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Upflow sells its accounts receivable automation software tool to mid-sized companies with revenue between $10 million and $500 million annually. The company’s largest client generates about $1 billion in annual revenue.
“But when you ask (CFOs), what is your strategy for setting up direct debit on a portion of your customer base?” “They have no solution,” Luisi said.
Upflow helps you set up incentive strategies so that a portion of your customer base transitions to online payment, such as card or direct debit payments. The idea isn’t that all your customers will pay with a business card overnight. But Upflow can help you change the payment method for about 20% or 30% of your customer base.
Just as CRM helps you manage your sales processes with customers, Upflow now wants to be a Financial Relationship Management (FRM) solution. It’s an interesting strategy because it shows how a startup like Upflow is thinking about diversifying its revenue streams.
“As our model shifts, we’re moving from a model where we’re 100% SaaS revenue to a hybrid model where we have SaaS revenue and payment revenue because we have our own payment gateway that we built with Stripe,” Luisi said.
Payment is the second building block in the Upflow product suite. Next, the company plans to integrate financing options with “buy now, pay later” B2B payment methods on the supplier side and discount invoices owed to the company.
“We are evaluating solutions…that provide blended financing,” Luisi said. “It’s not our core business to do a risk assessment. On the other hand, what’s interesting is that we can give them useful credit scoring data that they don’t necessarily have when they connect to one of our user accounts.
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