HBSC and Tradeshift to Develop Embedded Finance Solutions and Apps

HSBC and B2B commerce platform Tradeshift have agreed to form a joint venture that will develop embedded finance solutions and financial services apps.

The agreement is part of a funding round and will see HSBC invest $35 million in Tradeshift and join its board, the companies said in a Tuesday (Aug. 1) press release. In total, the funding round is expected to raise $70 million from HSBC and other investors.

“The world’s biggest trade bank and the world’s largest trade network are joining forces,” Tradeshift CEO and Co-founder Christian Lanng said in the release. “Our deepening partnership with HSBC delivers a strong foundation from which to scale and accelerate our vision of a trade network that creates economic opportunity for businesses everywhere.”

As an international trade bank, HSBC supports 1.3 million businesses worldwide and facilitates $800 billion of trade flows each year, according to the press release. Tradeshift’s platform supports 1 million businesses and $260 billion of gross merchandise value (GMV) annually.

In their new joint venture, the two companies will deploy digital solutions across Tradeshift and other platforms, including payment and FinTech services embedded into trade, eCommerce and marketplace experiences, the release said. The joint venture is expected to launch early next year.

“Enabling and growing global trade has been in HSBC’s DNA for almost 160 years,” HSBC CEO of Global Commercial Banking Barry O’Byrne said in the release. “We are very excited to partner with Tradeshift to help businesses and their suppliers trade more smoothly using world-class technology and solutions that the joint venture will deliver.”

PYMNTS research has found that embedded finance can help move B2B transactions beyond the confines of the paper check and the paper invoice.

More than 80% of banks either offer or plan to offer clients the ability to use their own enterprise resource planning (ERP) systems to access accounts and make payments to suppliers or vendors, according to the “Embedded Finance Tracker®,” a PYMNTS and Galileo Financial Technologies collaboration.

That capability streamlines the interactions up and down supply chains in which paper checks still account for more than 50% of B2B payments.