The invoice finance market is poised for disruption through distributed ledger technologies and cryptocurrencies. TFG recently spoke to Dror Shapira, CEO of INVioU about their platform which uses AI and credit scoring to facilitate short-term lending for SMEs.
TFG spoke with Dror Shapira, CEO of INVioU.
Dror holds an MBA in finance and a record of 15 years of managing debt, cash flow, and risk in both private and public companies, mostly in Israel. Dror teamed up with Yair Zehavi who is the CPO, who comes from the high-tech world of security products, exchanges, and clearing houses, as well as a group of very skilled professional code engineers to enable the launch of INVioU.
Tell us more about INVioU – what does it do?
We have created a blockchain protocol that enables small businesses to log and verify their financial documents. This gives them a trusted and fraud-free credit reputation. Based on that reputation and an intelligent credit scoring, we can facilitate short-term lending for them, starting with invoice financing. We are leveraging blockchain to bring simplicity and speed to short-term funding for small businesses, which they need.
How will INVioU help SMEs?
By reducing red tape and using intelligently automated credit scoring processes, SMBs can now qualify at credit institutions, allowing for a real marketplace between small businesses and lenders.
Can you give any examples of how INVioU has worked and why is this novel?
We have worked out the pain-points on both sides of the transaction, which allows us to create a marketplace of trust that avoids and overcomes the old-world shortcomings of invoice financing. INVioU found the appropriate solution for both privacy and encryption over the blockchain that facilitates the platform.
How can blockchain help expedite payments, reduce risks and reduce fees?
The blockchain is an excellent ledger for financial transactions — but it’s not limited to that, of course. It offers us three operating advantages. First, it reduces risk and creates trust in otherwise trustless situations. Second, it guards against fraud among participants and invites legitimate parties into the transaction. And third, it reduces human touch and thus human error. All of these traits lead to reduced fees as well as enabling new players to enter the lending market on either side.
What experiences and learnings from your past were pivotal in making the decision to launch INVioU
The main issue we saw over and over again is that small businesses, which are the backbone of many modern economies, were being denied finance from the “usual suspects” — principally the banks. Those who were granted access found suffocating prices — enormous fees and interest rates, which their margins typically cannot absorb.
Tell us about the Assignment of rights (factoring) product, digital recording and signing and proof of delivery concepts
Our platform enables a business to upload digital invoices onto the network in an encrypted manner, tokenizing them so that they can be transferred between the parties, and allowing for different kinds of proof to be stamped on the blockchain, rendering it immutable and thus minimizing risks.
Is the Blockchain technology market different in UAE than in the Europe, US and AUS? Other countries? If so, how?
I believe that progressive regulatory environment will allow different networks to adopt the technology to their benefit. Blockchain and its inherent traits is a game changer for countries that want to reduce fraud in business, and it can be very productive in the public sector as well.
What do you consider to be the greatest opportunity for blockchain in the near future?
Ultimately, it could be a standard used by all public registrants for the benefit of the public.
How do you see blockchain integrating into the future of business financing / working capital management and other fundraising needs?
The blockchain is the perfect deal maker in the financial realm. Smart contracts, when properly managed, can save hundreds of human-years and prevent human errors. It can facilitate new markets and participants, and it can significantly alter and normalize the lending landscape for SMEs and allow supply chain management with certainty and reliability .