Guaranteeing a Level Playing Field
In 2018, we saw momentous growth in fintech investments to a worldwide total of $111.8 bn, representing a year-on-year increase of over 100%. This drives innovation, fuels competition and – in certain sectors – accelerates market consolidation. Especially in the B2B space this kind of market dynamism can generate uncertainty for customers, as there usually is a strong dependency on the service provider which cannot easily be substituted. A good example for the importance and reliance on a stable and trustworthy partner can be clearly seen in the working capital finance market, where companies depend on external partners for crucial services to co-run their operations and support their supplier base. As a result, customers are looking for stability indicators when choosing their partners. However, in the case of platform providers such perceived stability can come at the cost of their independence which might run contrary to the concept of a free and open marketplace.
Choosing Who to Partner With
The criticality of the services provided and a high cost of a bad vendor selection have shown that in addition to the technical superiority of the service provider and the future potential, customers in working capital finance solutions put just as much emphasis on the evaluation and selection of their partner.
Therefore, we at CRX believe the following requirements are must-haves to consider from a customer’s perspective when choosing a platform provider:
- Robust business model paired with clear strategy and strong management team
- Firm commitment to the independence of the platform with no potential conflicts of interests with single interest groups
- Successful track-record with notable reference clients and solid growth
- Backing from strong and long-term oriented shareholders
- Transparent and stable funding structure
Avoiding Conflicts of Interest
Right from the start, the founding principle of the CRX marketplace was to provide a level playing field for all its customers both on the origination and funding side. This mission must of course also be supported by our shareholders. While we work very closely with banks as the financing partners of our marketplace, we take great pride in being bank-independent which for us is a promise to our customers that only the smooth operations and the strong development of our marketplace guide our decisions – completely impartial to any single banking partner or a consortium of banks. Not being biased by the interests of individual market participants or shareholders allows for an open market governed by fair and transparent rules and protected from any monopolistic or oligopolistic market distortion.
Being Committed to the Long Term
The same can be said about our shareholders who have backed CRX since its inception in late 2012. We have been very selective in choosing our shareholders and have so far refrained from accepting large institutional investors such as VCs, banks, or PE companies as our shareholders relying instead on a solid network of entrepreneurs and high-net-worth individuals as long-term equity partners. While large institutional investors could be perceived as a seal of approval, we operate in a long-cycle business model and were solely focused on the long-term success of the company as well as its independence from short-term mentality. Furthermore, we are convinced that the interests of a marketplace – especially in its early stages – cannot be properly represented by an ownership structure where competitors or large institutional players can actively define the future path of a provider-company. In the face of highly attractive offers this was a very conscious and sometimes tough decision.
In view of all this, seeing the CRX marketplace thrive, is the best endorsement we, our shareholders and especially our market participants – corporate customers as well as financing partners – could ask for.