Thought Leaders in Financial Technology: Eyal Shinar, CEO of Fundbox (Part 7)

Sramana Mitra: Does Apple need to click on your button too on the platform?

Eyal Shinar: No.

Sramana Mitra: Then you don’t need any integration with Apple.

Eyal Shinar: That’s correct. That’s what I was saying earlier. In most scenarios, we don’t need anything from the buyer side. The way to think about it is you need to integrate Fundbox Pay. The integration there is a one-click process.

Before that event, you have all those cash expenses. At that point in time, you need credit to bridge this gap. This is where we’re going to meet you.

Another example would be, we ran this pilot with a company called Gusto. When you’re a business owner, you need to make sure that you’re making payroll on time. We integrate at that point in time for making payroll. You click on that and you get cash from Fundbox now.

The third example is, you have an outstanding invoice. In your Quickbooks, you see that invoice and you really want to get the cash now. That’s the right point of a financial trigger to click on the Fundbox button. It’s the platform approach.

It’s very different than what I described earlier. Even in cases, the financial context is a transaction. We try to meet the needs of each scenario. We don’t integrate into Apple’s systems. I don’t want to say it’s suicide, but it’s going to slow us down substantially.

Sramana Mitra: If you don’t need to integrate into the Apple system, you don’t need to integrate. You used the credit card analogy. It’s helpful and confusing. In that scenario, it’s the buyer who pays the interest.

If you do extend beyond the 30-day cycle and want to get financing for the credit you have taken, it’s the buyer who’s paying the interest. In your case, it’s the seller who’s paying the interest.

Eyal Shinar: No, it’s whoever took the credit. In the Fundbox Pay case, where the credit card analogy was used, the buyer is always the smaller business. The seller may be small, medium, or even a huge company. 

Sramana Mitra: Not at all. The buyer is not always going to be a small business. If I’m selling to Apple, I may want to use Fundbox to finance that transaction through you.

Eyal Shinar: Our product is going to be relevant, in the Fundbox Pay case, to buyers who are smaller than the seller.

Sramana Mitra: Your product doesn’t apply to that scenario.

Eyal Shinar: My product doesn’t apply when Apple is a buyer.

Sramana Mitra: Why is that?

Eyal Shinar: Mostly because of the point you brought up earlier. Apple doesn’t need us.

Sramana Mitra: I’m saying the seller needs you. If I’m buying from Apple, and Apple is going to pay me 90 days later, I need the cash now.

Eyal Shinar: In that case, you’re going to use the platform that I described. You’re not going to use Fundbox Pay. 

Sramana Mitra: Why is that?

Eyal Shinar: There are two ways to consume the product. One is what I described, which is the platform approach. I sold to Apple. I know it’s going to take them 90 days to pay me. Then I’m going to use Fundbox as a way to advance on that receivable that is still outstanding.

That addresses the need of the seller who sells to Apple. There can also be use cases where you’re a seller who sold to someone else that is not Apple. You want to sell more and you want to get paid now. Then, you’ll use Fundbox Pay.

As a seller, you’re not getting credit. You’re just getting paid now. The buyer in this transaction is basically getting free terms. After this, the buyer has an option to use credit. In the case of Apple being a party to the transaction from the buyer side, they don’t have the first product.

Sramana Mitra: In the case of a large business buying from a small business, you’re using receivable financing as the primary transaction business model. In the case of small business to small business, you can do both.

Eyal Shinar: Yes, that’s pretty much right. You need to decide the use case. Are you mostly a seller and you want to sell more and offer financing to your customers? If you’re a seller, you can be a big company because we help you sell more. Or you’re a seller to a company like Apple, who is not in the Fundbox network today, it’s going to be hard to implement.

Sramana Mitra: Excellent conversation. Thank you for your time.

This segment is part 7 in the series : Thought Leaders in Financial Technology: Eyal Shinar, CEO of Fundbox
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