Thought Leaders in Financial Technology: Nectarine Credit CEO Alex Armitage (Part 4)

Sramana Mitra: How did you get your first customers?

Alex Armitage: We have some other businesses. A couple of them are e-commerce companies. We knew that space quite well. We knew that this was a problem. We had hundreds of relationships with companies in various industries. We had hundreds of contacts in that space. We went to them and said, “We’ve done business in the past. We know this is a problem. How can we make this process easier?”

We partnered with them. We didn’t build anything in a vacuum. You understood the problem from your prior business life and you had contacts who had experienced that problem. A lot of them didn’t even see it as a problem. It’s a system that they had for 10 to 20 years.

Sramana Mitra: They’re used to it.

Alex Armitage: Exactly. You need to show them how efficient digitizing is.

Sramana Mitra: We have been looking at all kinds of customer problems. In FinTech, solving various credit-related problems and speeding up the credit approval process has been a recurring theme. You have presented a very interesting nuance in a sharply positioned problem domain where you have a simple solution.

It’s a complex solution from an implementation point of view, but, at the end of the day, it’s not complicated to describe the problem and solution. There’re a lot of integrations and partnerships that you have to create to make this work at scale. 

Alex Armitage: Absolutely right. It’s a simple problem. It’s almost so simple that people didn’t see it as a problem. Typically, it’s accounting clerks who are doing that.

Sramana Mitra: Switching gears, I would like to ask you to take a 30,000-foot view of the business credit space. Are there other contexts or nuances that are on your radar that have not been solved?

Alex Armitage: You just potentially revealed the fault of ours that we’re focused on B2B.

Sramana Mitra: You should be focused on your domain. I’m asking from the point of view of new entrepreneurs. We educate new entrepreneurs. We always try to unearth from people who have an interesting vantage point. 

Alex Armitage: We’re just so focused on what’s in front of us. We’re young and nimble. It is important to look out. I don’t have a great answer for you. The future of credit is going to be some sort of AI decisioning process. What that looks like, I don’t quite know yet. I believe that it’ll be less manual work. Some of this is already done. People in the FinTech space will start to excel.

You mentioned OnDeck and Kabbage. Amazon offers sellers financing. It took them a long time to introduce financing to sellers. They know the cash flow. They know the turnover. They know the speed. They can take a pretty good guess at the margins. They know that during the holidays, people bulk up their inventory.

That is an amazing AI credit decision tool that we’re going to see more of. We will get to the point where we will offer financing. We will have data. We are recommending this company get a thousand dollar credit. The credit provider will say, “That’s too rich for our blood. We don’t want to offer them.” Then we can step in and offer credit.

Sramana Mitra: The whole game is data. Once you have data, you can play that on many angles. Some of the players are in interesting strategic points like Amazon, Intuit, eBay, and American Express. They have data and they’re lending against that. Players like you who provide software in this space are going to accumulate interesting data against which there will be additional FinTech opportunities.

Very interesting. Thank you for your time.

This segment is part 4 in the series : Thought Leaders in Financial Technology: Nectarine Credit CEO Alex Armitage
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