Post by Gareth Lodge
There have been a few mainstream press mentions of e-invoicing and invoice financing over the last few weeks. For many readers not closely following the space, I suspect this will be the first thing they’ve really seen about the topic. Some of the numbers quoted in the articles have been eye catching – a trillion pound of untapped potential. This is what has attracted some big names to the market, and who has generated the coverage.
In short, one player, Ed Truell has “bet big” on the market – but not all in the market are convinced. Truell has bought one of the larger (but not largest) players OB10. OB10 has not been as successful as it had hoped – indeed many press mentions state that is has been loss making. To be fair, our understanding is that the vast majority of e-invoicers have yet to recoup their investments.
Truell then bought a small Israeli owned bank in London as a shortcut to gaining a banking licence, and therefore be able to offer invoice financing itself. The combined entity, rebranded as Tungsten, added a few other elements and went to market last year. Since then, a string of impressive customer announcements have been made.
In short, the analyst questioned both the potential market and the likelihood of Tungsten succeeding. The share price of Tunsten fell 34% the next day, taking £75m off the value.
As clients know, I’ve written a few reports on this topic and have advocated that banks investigate how they can get involved. At face value then, I agree with Tungsten. However, as I joke in my reports, every spring seems to be heralded by the claim THIS is the year for e-invoicing.
And for the 10+ years I’ve been covering the topic…. it hasn’t been.
Every year has seen progress, with greater numbers of e-invoices. But there are still issues. There are over 500 suppliers in Europe alone, many of whom are backed by investors eager to see a return on their investment. The U.S. operates in a different way, with more of a focus on bill pay organisations offering services. In short, whilst I share the optimism of Tungsten, history – and hard won personal experience – suggests that the market we both envisage is not happening today, and is unlikely to in the near future. The question, as it has been for many years, how soon is soon. How soon is soon enough for the investors?