AREX, derived from “account receivables exchange”, offers a platform for small businesses to sell their unpaid invoices to generate cash flow. According to the startup, cash loaned to SMBs has dropped around 50% in recent years.
“By building a live, automated and algorithm-based trading platform, where companies can set their own prices for their invoices, AREX is enabling both SMBs and the larger corporates who use our exchange to instantly turn their unpaid invoices into cash,” said AREX CEO Kim Forsman.
AREX is currently live in Finland and plans to launch in the UK next year, supported by its offices in Helsinki, London, and Barcelona.
AREX charges 0.25% per invoice financed with the startup claiming that because investors and businesses communicate via the platform, its total cost of transaction is 70% lower than traditional methods.
“Kim and the team are building an entirely new asset class, that is both a new model for investors, enabling them to participate in SMB financing in a way that simply wasn’t possible before,” added Timo Ahopelto, partner at Lifeline Ventures, “and a critically important way for small and medium businesses – potentially across the world – to release their working capital.”