I love the B2B e-invoicing and supply chain finance market. It’s huge, global, fragmented, and full of contenders making a lot of noise: Ariba, Tradeshift, Taulia, Prime Revenue, occasionally big banks, Obelisk, Demica, PowerTrack, Syncada, GXS, CASS, Bottomline, etc., etc. etc. Most observers expect some combination of software and banking to succeed, but finding that balance has been hard. Banks generally stink at software, but no one trusts software companies with their money. Now we have a public company, Tungsten (LON: TUNG), who is trying to crack the code together in a high-profile way.
Here is how Tungsten describes what it has done, so far, on its website:
On 16 October 2013, Tungsten Corporation was admitted to trading on the AIM market of the London Stock Exchange, raising gross proceeds of £225 million. Tungsten’s market capitalisation on admission was £225 million.Proceeds from the IPO will be used as follows:
- £73 million to fund the cash element of the acquisition of OB10 Limited, the leading global business to business e-invoicing network:
- £58 – £60 million to finance the acquisition of FIBI Bank (UK) Plc (subject to regulatory approval) and to provide solvency capital to support the invoice discounting activities of the Bank;
- £15 million for working capital and business development purposes; and
- £14 million to fund acquisition and transaction fees and expenses, with a further £2 million payable at the board of Tungsten’s discretion.The Placing of £160 million represented the largest trading company IPO on AIM since 2008.
Tungsten’s strategic visionThe strategic vision of Tungsten is to create a leading cloud based global trading network, monetising the existing OB10 e-invoicing platform with the addition of value added services such as seamless electronically secure encrypted invoice discounting against “approved for pay” invoices, substantially reducing fraud and dilutions risks so evident in traditional “old model” supply chain finance; and the provision of spend analytics technology across OB10’s established network.