After operating in beta stage since its founding in 2014, Kickpay is ready to make its debut on the supply chain financing scene.
The startup, which first found backing from incubator Y Combinator, has been working on an invite-only business model for the last two months, according to reports. Its founders have not yet revealed how many investors and businesses participate on its funding platform, but the firm revealed that it has provided more than $1 million for companies.
Kickpay focuses on small- and medium-sized businesses looking to take greater control of their cash flow. The startup provides capital for SMEs’ invoices up-front, meaning small businesses do not have to wait for their financing. Investors, Kickpay said, can often see double-digit returns.
According to Kickpay CEO and co-founder Andrew McCalister, these small businesses are working hard to offer innovative services and products, “but they start being a bank when doing deals with Costco or other large organizations.”
“It’s like me buying a latte, but paying for it 30 or 60 days later,” he told TechCrunch.
Kickpay’s financing integrates directly into SMEs’ Quickbooks or other financing software to facilitate the settlement of invoices. And through its partnership with Wells Fargo, Kickpay uses market and data analytics tools to generate its lending rates. “It’s not like a normal loan,” McCalister said. “[Investors are] betting on when Costco will pay out, which has less risk than an SME paying back over a two-year period, for example.”
While it has run in beta mode as of late, Kickpay has secured funding from the likes of former executives of financial all-stars like PayPal, Mint and Palantir. Once finishing the Y Combinator program, McCalister said, the company will then aim to nab new engineers to fully launch the service, and will focus on making the tool easy to use for investors.
Looking ahead, Kickpay told reporters, the corporation could explore a mobile extension of its current desktop platform, and will soon begin to generate revenue by taking a cut from both lenders and borrowers. Those fees, however, have not yet been decided, reports said.