03 May Seedstars World winner Acudeen fixes cash flow problems of small business owners
Cash flow is crucial for small businesses’ survival, but they often have to wait 90 to 120 days to get paid by corporate clients. This is where Filipino startup Acudeen, recently crowned winner of this year’s Seedstars World competition, aims to make a difference.
With the US$500,000 equity prize from Seedstars, Acudeen wants to service more small businesses in the Philippines and Southeast Asia by paying their invoices on behalf of corporations, using its credit line from a partner bank.
What the company does is plug into corporations’ accounting software to validate the invoices of their suppliers. Upon validation, it disburses the money to suppliers in three working days, getting rid of the painful wait for funds.
“90, 120 days are too long especially for a business with cash flow problems,” says its founder Mario Jordan “Magellan” Fetalino III.
Acudeen earns by buying the invoices at a discount of 2 percent per month, Magellan tells Tech in Asia. So if a supplier has an invoice worth US$10,000 that’s maturing in 90 days, Acudeen buys it for US$9,400. Once the corporation fulfills the invoice, the startup keeps the balance of US$600 as profit and then pays the bank for the credit line.
The team has onboarded corporations that work with 200 suppliers in the Philippines, where it has “early mover advantage.” It’s processing close to US$1 million worth of invoices each month.
Magellan says they’re working on a new risk assessment model that will allow more suppliers to tap their service. “We’re going to open it up to more small businesses, even if their payers are not in our client roster.”
Since 95 to 99 percent of business establishments in Southeast Asia are small and medium enterprises, Magellan says they plan to expand beyond their home market.
Acudeen bested 11 other startups that pitched their business ideas at the Seedstars World in Switzerland, in front of an international panel of judges. It’s the second Filipino startup to win the global competition – payroll service Salarium bagged the trophy in 2015.
The company, also winner of 2016 Tech in Asia Tokyo Arena pitch battle, is backed by 500 Startups, Nullabor Ventures, and an angel investor.