Jessica Ellerm is a thought leader specializing in Small Business and the Gig Economy and is the CEO and Co-Founder of Zuper, a neowealth disruptor in Australia.
Do one thing and do it well. It’s a mantra that has quite possible served UK fintech Funding Xchange well. This week the SME lending marketplace announced it had secured a fresh round of funding, banking €9.3 million in a round led by Downing Ventures and Gresham House Ventures.
The company, led by co-founder and CEO Katrin Herrling, has built a platform that allows businesses to receive personalized funding quotes in minutes from its panel of over 45 lenders. It’s a lesson in power of APIs, and how they continue to transform financial services for businesses and consumers alike.
Take FundingXchange’s integration with notable SME fintech lender iwoca as an example. By integrating with iwoca’s API suite, actionable and real-time loan decisions are able to be delivered to small businesses on the FundingXchange platform, within 30 seconds. If the business then chooses to accept this loan, it’s just the digital equivalent of a hop, skip and a jump over to iwoca, where they can proceed to draw down the funds.
This is a financial marketplace that is more than just a lead generation platform for SME lenders. This is fundamentally changing the go-to-market strategy of a fintech lender. Yes, direct acquisition will always play a role, but API enabled acquisition is incredibly powerful. Be where they eyeballs are, rather than try to divert a potential customers attention. That is the new mantra of API enabled businesses who embed this thinking not just in how they build the underlying data collection that powers credit models, but in how they market and sell their products.
Aside from innovative integrations like this one, FundingXchange plans on rolling out a white label offering, which streamlines key steps in the underwriting process for other banks and lenders.
But why stop there? The ultimate end point of all of this, surely, is the removal of any concept of ‘applying to the bank or lender’ by a small business, when it seeks financing terms from a supplier. At-the-point-of-sale finance, enabled by API integrations between lenders and cloud accounting platforms, should eventually abstract this concept altogether. Instead, when I buy something and I want financing, I should receive the best terms available, embedded in my invoice, and sourced from a panel of lenders, similar to FundingXchange.
The API economy is an egoless economy, where integration and ease for the end user have the power to beat brand names. That’s today’s game.