iFactor – Alternative SME Finance Platform in Romania

Cosmin Curticapean, CEO & Co-founder of iFaсtor

iFactor is an online platform in Romania that aims to become the first online B2B marketplace, bringing together investors and SMEs looking for alternative financing.

Olena Gryniuk talked to Cosmin Curticapean, CEO and Co-founder of iFactor, about the Romanian market, the company’s achievements in 2019 and future plans.

Olena Gryniuk: iFactor is an online platform both for SMEs that need to finance their invoices and investors looking for diversifying their asset portfolios. Can you tell us more about iFactor?

Cosmin Curticapean: iFactor, as a technology company, envisions a world of innovation, digitalization and cutting-edge technologies, where all legitimate SMEs should have options for their trade finance needs. We are enrolling lenders/buyers from the traditional financial space, banks and NBFIs, as well as private investors, companies, and private individuals.

iFactor aspires to offer SMEs a comprehensive range of price competitive technological and flexible finance solutions for working capital needs. iFactor’s first deployed financial product is factoring and will be followed soon by SME loans. iFactor’s innovation doesn’t only relate to technology, but also to the business concept. iFactor gives customers (both sellers/borrowers and buyers/lenders) the value of the best product at the click of a button.

OG:Was 2019 successful for iFactor? What were your main achievements?

CC: Some of our achievements in 2019 included:

  • Expansion of our team
  • Development of a new version of the workflow engine based on RPA
  • Entering post-revenue by acquiring SME customers
  • Graduating the Startup GrowPad KPMG Spherik Accelerator
  • We have obtained clearance for Private Investors to become buyers on the iFactor platform, through a process led by KPMG and supported by the NBR (National Bank of Romania), and we are proud to be the first company on the romanian market to have this documentation approved
  • We were admitted into the Scale up Innovix BCR acceleration program from which we will graduate in March 2020. Based on this program, we were selected to pitch in the Startup Grind global conference Silicon Valley on February 11
  • We successfully organized the AI in Finance Hackathon and deepened our partnerships with great companies such as CFTE London, KPMG Romania, Bank Transilvania, UiPath, Microsoft, Saltedge, Netopia and others.

OG: How many entrepreneurs know what factoring is on the Romanian market

CC: Fortunately, enough to start our business, but unfortunately not enough for a sustainable economy. Our market study in 2018 showed that between EUR 150,000 and 2 million yearly turnover, 47% of entrepreneurs know or properly understand what factoring or invoice discounting is.

OG: How do you deal with that? Do you try to educate small businesses? And if so, how?

CC: Our strategy regarding entrepreneurial and financial management education is basically to target our customers’ business growth instead of sales conversion. We took this approach as we are focused on SME needs and not on the financial product since we are engaged in future technology and innovation instead of today or yesterday’s finance. This translates into using the best technology to convert traditional and alternative data into creditworthiness. Banks have tried to educate entrepreneurs for ages by investing lots of money and the result is still unsatisfying. Therefore, we try to have a 360° approach to SMEs for better access to liquidity. After their first debt rounds, they can join our educational program to gain skills and understanding of how to grow their businesses.

Based on our model of collaborating with SME banks, we are doing shared events on the topic of their platforms and customer base. We organize webinars and meetups in partnership with Rofin.tech, CFTE, Founder Institute and others.

OG: Who is your customer exactly? Can you describe the profile of your average customer?
CC: Our Go to Market strategy splits our customers into 3 target profiles based on a specific timeline. In Eastern Europe, we target companies with EUR 200,000 to 2 million turnover with some differences based on geography, industry, etc.

OG: What is the maximum amount you finance per customer?
CC: As we also have banks as lenders on the platform, we do not have a maximum cap.

OG: What are your channels for customer acquisition? How many of them do you get via online channels?
We acquire customers through introducers, partner bank databases, online channels and also through direct sales. Online channels are now at only 35% but we aim for them to become mainstream.

OG: How do you cooperate with banks?
We have adjusted our technology in such a way that we can basically offer smart leads to banks, reducing their processing costs and time to decision. Through our platform they can offer tickets as low as EUR 1,000 for a very short period of time.

OG: How many people work at iFactor? How many of them are IT personnel?

CC: At the moment, IT accounts for 5 of our 12 employees and for some specific capabilities the extended IT team is 10 people.

iFactor’s core team

OG: Now you work on the Romanian market. Have you considered expanding to other markets in the CEE region?

CC: We plan to expand first in the UK and DACH in the year 2020, but we are also looking to Poland and the Czech Republic around late 2021. We are aware that the European fintech landscape is dynamic, so we are always exploring and interested in opportunities.