Berlin has a new fintech player in Topi, a startup aimed at kicking the traditionally long and tedious B2B payments process into overdrive. The startup has emerged from stealth today and has announced a raise of $4.5 million in pre-seed funding to accomplish this goal.
While the B2C consumer space has received plenty of love over the years; multiple payment options, credit or debit, digital wallet options, insurances, and BNPL options, Klarna, Scalapay, etc., the B2B sector has, well, always been the ugly cousin that not many want to ask to the dance.
One of the ways and means for these leaps and bounds in the B2C space has to do with open banking and a digitalised process. For B2B purchases, the sector seems to be hanging on to the, “if it ain’t broke, don’t fix it,” mentality, but the plain and simple truth is: it might not be broken, but that doesn’t mean it can’t be done in a far more efficient and speedy way.
And this is exactly where Topi steps in. When businesses make a purchase, particularly a big-ticket item, they either have to cover the cost of this investment in full, upfront, individually negotiate each item, or head to the bank and apply for a loan. Any which way you look at it, time that could be better spent elsewhere on the further development of the business.
“Companies make purchasing decisions almost on a daily basis. Yet there are no fully digital end-to-end processes in B2B sales and no customer-friendly financing offers. The result for many companies, especially SMEs, are suboptimal purchasing decisions, inefficient use of capital or lengthy bureaucratic processes,” comments co-founder Charlotte Pallua. “Our company aims to provide business customers with the opportunity to use our technology and financing solutions to change just that.”
Granted, the ticket size of a B2B purchase is often a much higher multiple of a B2C purchase and thereby puts the financier at greater risk. Topi is acutely aware of this and while not specific about just how their “yes” or “no” decisions are made, I’m willing to make a fairly educated guess that they’re developing an algorithm that taps into a variety of data sources (payment processors, opening backing reports, etc.) via APIs that when combined will output a “yay” or “nay” answer, as the company reports approvals that can happen in seconds.
Topi’s $4.5 million pre-seed round is co-led by Index Ventures and Creandum, with an impressive list of angel investors on board including HelloFresh founder Dominik Richter, N26 founder Max Tayenthal, Adyen founding team member Thijn Lamers, and WeFox CFO and founder Fabian Wesemann.
Creandum’s Simon Schmincke concludes, “To date, B2B payments is a largely underserved space, lacking innovation and a customer centric product vision. topi is enabling any business to optimise expenditures. We see topi’s solution to be relevant for almost any business out there. Their approach is completely unique and hugely promising.”