Esker invested on April 20, 2022 in “supply chain finance”. The Lyonnais publisher takes a stake (in convertible bonds for 5 million dollars) in its American partner LSQ.
The two publishers had reached an agreement in October 2021. Since then, LSQ’s Supply Chain Finance solutions have been integrated into Esker Pay, the Lyonnais’ integrated payment solutions portfolio.
Reverse Invoicing and Dynamic Discounting
“Supply chain finance” consists of creating a financial ecosystem between suppliers and customers to ensure the sustainability of all actors in the chain.
The underlying idea is that losing an important supplier or customer can be detrimental to the activity of one’s own company. Hence the interest in trying to perpetuate the long-term relationship, and therefore to consider oneself as an element dependent on other elements of an ecosystem.
Concretely, in this context, Esker customers can request direct financing of their invoices (reverse factoring or reverse invoicing) from the platform or, conversely, offer advance payment in exchange for a discount on the total invoice ( dynamic discounting).
For the Chairman of the Executive Board of Esker, Jean-Michel Bérard, this area is “a major challenge for the decades to come” which he wishes to “make the most of financially and operationally”.
Esker Fintech: From Invoice Backend Management to Business-to-Business Finance
Esker’s investment in Supply Chain Finance comes as no surprise.
Emmanuel OlivierCEO of Esker
In an interview with LeMagIT (to be published next week in our quarterly “Applications & Data”), the Managing Director of Esker, Emmanuel Olivier confided that this inter-company financing through a third party financier (Esker in this case) was an option of choice to extend the functional field of the French editor.
“When managing orders and invoices through to payment, a first level of solution is automation. But beyond paying the invoice when it is due, you may want to manage the deadlines: that is to say, delaying or accelerating the payment of an invoice to meet financing needs within the customer relationship. supplier”, explained Emmanuel Olivier. “When you do that, you’re doing business-to-business financing. Basically, you help companies finance their working capital”.
This type of financing is also clearly an alternative to banks. ” It’s a somewhat disruptive activity since, in concrete terms, it’s a solution for obtaining financing outside of companies’ traditional financial partners”, underlined the Managing Director for whom “it’s not necessarily a new field, but it’s starting to emerge in a strong way”.
Diversification continues for Esker
The Lyon-based publisher, a historic player in Procure to Pay (P2P with Purchase to Pay and Order to Cash), has been diversifying for several months to find sources of growth.
Esker has recently integrated sourcing into its offer and is clearly eyeing Procurement, a market that is converging towards P2P and which is positioning Esker increasingly in competition with Coupa, Ariba and other Ivalua – analysis Emanuel Oliver.
Investing in LSQ brings it into another playground, that of Fintechs.
In any case, Esker is not the only one to believe in the growth in demand for Supply Chain Finance. In January, the ERP giant SAP acquired an American Fintech (Tualia) to also penetrate this rapidly emerging market.