The Potential of Real Time Trade Finance. Our investment in Hokodo

Published on
June 8, 2021
Toby Coppel
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The Potential of Real Time Trade Finance. Our investment in Hokodo

By now, most of us have used or been offered a buy-now-pay-later (BNPL) option when we shop online. BNPL not only makes checkout experiences faster, but also drives consumers to spend more money. Klarna, Affirm, and Afterpay have infiltrated the checkout baskets of thousands of major retailers, with Worldpay estimating that BNPL services will cover nearly 3% of global e-commerce spend by 2023. The leading BNPL companies’ valuations reflect the enormous potential in B2C, with Klarna > $30bn, Afterpay $20B and Affirm at $14B. And yet, an even larger BNPL opportunity remains mostly untouched in B2B commerce.

In the US alone, B2B ecommerce sales are more than double that of B2C, with $6.7T in 2020 versus $3.2T in consumer spend. B2B transactions are also often larger and more complex than those in B2C, requiring more flexibility with payment methods. For example, the person making a purchase usually differs from the person paying and then again from person using the product. Credit application processes and reviews are manual, late payments have to be chased, cash reconciliation is time consuming, and managing third party providers from credit bureaus to factoring financiers to debt collection agencies requires significant resources. And offline, payment by invoice is standard for B2B, yet few e-commerce sellers offer this. Those that do, like wholesale marketplace Ankorstore, reap the benefits: Ankorstore recently raised $100M after tremendous growth over the last two years - Hokodo provides a seamless BNPL option at checkout for the majority of Ankorstore transactions.

Hokodo’s real-time Digital Trade Credit solution is available to B2B marketplaces across Europe. Hokodo automatically makes payments to merchants following delivery, manages all collections and late payments, and handles cash reconciliation. Using Hokodo, B2B marketplaces and SMEs see an average of 40% increase in revenue through improved conversion rates and larger basket sizes. How does Hokodo manage such strong results for customers? Their platform is both unique and scalable. Hokodo leverages data, banking partnerships and proprietary ML models to offer an end-to-end credit-as-a-service product.

Hokodo’s real-time Digital Trade Credit solution (credit: Hokodo)

Hokodo’s early successes are attributable to their world class team. Co-founders Louis Carbonnier, Richard Thornton, and Sami Ben Hatit have a wealth of experience in insurance and risk, and an even greater capacity to hire superb talent. Louis was first a Principal in Oliver Wyman’s Financial Services team before running the Digital Agency at Euler Hermes; Richard was a partner in the same OW group before becoming COO and Head of Strategy for Aspen Insurance; and Sami was CTO of Euler Hermes’ Digital Agency after many years building embedded systems at Hyperpanel. Their underwriting track record to date is near flawless, and has earned them customers’ trust and loyalty.

We are proud to partner with Hokodo to build the global leader in B2B real-time trade finance, leading their $12.5 million Series A round and investing alongside a number of close friends of Mosaic such as Taavet Hinrikus (Wise), Thijn Lamers (Adyen), Greg Marsh (OneFineStay), Daniel Hegarty (habito), and Lenny Picardo (Deliveroo) as well as our friends at Notion.