Businesses certainly purchase differently than consumers do. And, as the growth of B2B cCommerce grows, each business prefers to pay on its own terms, which can cause some upset in doing business. Startup Apruve began its own business by trying to solve that issue.
“For sellers to give their buyers the same option to pay later, they'd have to figure out how to offer payment terms online, so we built a solution to solve that problem,” said Michael Noble, Apruve’s cofounder and now CEO.
Founded in 2013, Minnesota-based Apruve is aiming to become the industry standard platform for B2B credit management. Recently, it launched its B2B credit management platform, while the entire business has been backed by TTV Capital and Allegis Capital, to name a few.
“The timing was right. B2B eCommerce is growing rapidly, and there's no de facto payment method to serve the specific needs of business buyers,” said Noble.
“Businesses buy from one another on revolving lines of credit (i.e., net 30/60). This is a cumbersome, manual process to manage (AR) and expensive (cost of capital, loss),” said Noble, who is a self-dubbed startup veteran coming from LimeWire and Xanboo. “It also does not translate well into the speed of eCommerce.”
The credit management platform automates aspects of customer credit management, from credit approval, to online ordering, to invoicing and collections.
“We work with third-party banks to underwrite all orders placed on terms so sellers are paid out within 24 hours and take zero credit risk,” said Noble. “We call it ‘CMaaS’ for Credit Management-as-a-Service.”
Industries that use Apruve’s platform include manufacturing, distribution and wholesale verticals, but now, the company recently landed its first Fortune 500, which will go live in Q1 next year. The company said it has increased online sales 30–40 percent for clients and reduced internal AR costs by up to 40 percent.
Noble added that Apruve manages and finances a seller’s credit program, to make lives easier and so it can get back to growing its business.
“We believe Apruve is solving a fundamental problem that will enable more businesses to ride the $1.3 trillion wave of B2B eCommerce that is currently unfolding,” said TTV Managing Director Tom Smith in a statement. “Their solution takes on outdated accounts receivable processes, automates it then underwrites the credit risk for the seller.”
The business has had some bumps along the three-year path, however, which many startups do.
“It was a challenge to figure out the financing component of our business model,” said Noble. “But we’ve found some great banking partners to help us underwrite our platform.”
And on the horizon now? A straight-up doubling.
“We plan to double in size over the next few months and hope to be managing more than 100,000 buyer accounts for our sellers,” said Noble.