#011 / 2 – The voices of our clients - NL – David Van der Looven - (Finrack)
Financing Inventory Differently: How Finrack Unlocks Business Cash Flow with David Van der Looven
Leave a voice message for David Van der Looven or Caroline Gasia !
Rethinking Inventory Financing: How Finrack Unlocks Working Capital with David Van der Looven
Inventory often represents hundreds of thousands, or even millions, of euros tied up in a company's capital. Yet it remains one of the most difficult assets to finance.
In this episode of Performance, Harmonie & Commercial, Caroline Gasia welcomes David Van der Looven, founder of Finrack, a Belgian fintech company specializing in inventory financing.
During the conversation, David explains how Finrack helps businesses unlock tied-up working capital through an innovative financing model in which inventory is temporarily acquired and valued using a proprietary algorithm.
The discussion also explores the commercial challenges of a fast-growing fintech, the development of new sales channels, collaboration with independent finance brokers, the differences between the Belgian and French markets, and the importance of maintaining strong customer relationships, even within a highly digital service.
In this episode, you'll discover:
- Why inventory financing is still relatively underused today
- The impact of COVID and disruptions in the global supply chain
- How the Finrack financing model works in practice
- How Finrack's proprietary valuation algorithm creates a competitive advantage
- The commercial strategy of a growing B2B fintech
- Finrack's expansion across the Benelux and France
- The partnership with PHCom
- Why outstanding customer service remains a key competitive advantage
- The commercial principle: "Underpromise & Overdeliver"
This episode is recommended for business leaders, CFOs, finance managers, sales professionals, entrepreneurs, scale-ups, fintech companies, and any organization looking to optimize working capital management without relying solely on traditional bank financing.
[00:00:19] Caroline Gasia: Hi David. [00:00:20] David Van der Looven: Hi Caroline. [00:00:21] Caroline Gasia: Great to have you as our guest today on our podcast for PHCom. First, tell us a bit about Finrack. [00:00:28] David Van der Looven: First of all, I am also very happy to be here with you. Finrack is a Belgian fintech based in Brussels that operates across Europe in a very specific niche: asset financing, and more specifically, the financing of stock, of inventory. Inventory actually ties up a company's working capital; there is capital locked in there that cannot be used anywhere else. We have seen that during COVID, just-in-time delivery has been on the decline, and more and more inventory is being built up worldwide, so stock levels are rising globally, which means more capital is tied up. And we started looking for a way to make that tied-up capital partly liquid again. And what does Finrack actually do? We purchase the inventory, and the client can buy back their stock with an exclusive buyback option at the same value at which it was sold. So, as they need their inventory, they can also buy those stocks back. This is done very smoothly in a digital way. So there is... What lies behind it may be complicated, but in practice, it is very simple, and they have additional resources. [00:01:38] Caroline Gasia: What distinguishes you from the competition today? [00:01:41] David Van der Looven: Well, when we started looking at opportunities to finance stock worldwide, we were very surprised to see that there are actually very few instruments for stock financing. That is why we jumped into that gap. And honestly, there is virtually no competition in that area. [00:01:57] Caroline Gasia: Do you see differences between the French, Belgian, or other markets? [00:02:00] David Van der Looven: Finrack is actually present in the eurozone. The countries we chose to develop from the start are actually the Benelux and France. France is an important one because there is a more digital mindset among entrepreneurs there, and also, for example, unlike in Belgium where you have a fairly good level of service from the banks. While you have a quasi-monopoly of five banks serving the market, you don't have that in France. And what do we actually see there? That entrepreneurs will consult a bank when looking for financing, but at the same time will also consult a network of independent financial brokers, credit brokers, to find a solution. And it is actually that network of independent intermediaries that we work with and that actually promotes Finrack in France, and that works very well. For a start-up like Finrack, it is of course a very good sales channel, because you are dealing with a variable cost. And if financing is provided, then revenue is generated and you pay a commission to that intermediary. If they do nothing, then you have no cost. Unlike other channels where you often have to invest upfront and you don't know what the return will be and when that return will come. [00:03:12] Caroline Gasia: What are the biggest commercial challenges today? [00:03:15] David Van der Looven: The challenge, of course, when you come up with a new product, regardless of whether it is financial or not, is to market that product and develop sales channels. And we look for any sales channel in doing so, but as a young company, you also have to control your budgets. And yes, we do some testing to develop new sales channels, such as cold calling, for which we started working with PHCom. [00:03:39] Caroline Gasia: How do you ensure that customers remain loyal in the long term? [00:03:42] David Van der Looven: Yes. Retaining customer relationships, the customers we have—what is very important is simply offering very good service, and also maintaining contact with your customer. We are a digital company, we usually do not see our customers physically, but if you combine that with a video call or a phone call, which establishes your presence with the customer, you still build a very strong relationship. [00:04:06] Caroline Gasia: What competencies do you think a good sales representative absolutely must have today? [00:04:10] David Van der Looven: Very simple, an adage for a good sales representative is: "don't promise too much and deliver more than you promised", it's actually about expectation management. It is very simple, if a client expects a lot and you don't deliver, they are dissatisfied. If you promise little and deliver more, then you are a god to your client, and that is what we ultimately strive for. [00:04:31] Caroline Gasia: What are Finrack's commercial objectives today? [00:04:34] David Van der Looven: Yes, the commercial objective for Finrack is of course to grow, grow, grow, grow and become as big as possible. So yes, finding and acquiring new clients. [00:04:43] Caroline Gasia: How do you see the future of Finrack? What plans are on the agenda? [00:04:47] David Van der Looven: What is planned for the future of Finrack is that we grow bigger, that we can cover more countries geographically, and that we also further fine-tune the financing product and perhaps create a number of sub-products that fit well into certain niches in the market. [00:05:05] Caroline Gasia: In your opinion, what is Finrack's greatest strength today? [00:05:08] David Van der Looven: Yes, the unique selling point of the Finrack model is actually the valuation algorithm that we developed to have a correct valuation of the stock in real time, at any given moment. Nobody at this moment is capable of doing that, and that is also what banks are now starting to look at and consult us on, whether they could potentially make use of this algorithm to improve their risk management. [00:05:36] Caroline Gasia: Thank you very much, David, and best of luck. [00:05:39] David Van der Looven: You're very welcome.Podcast Timeline:
Podcast transcript:
Introducing Finrack
What does Finrack do?
What sets Finrack apart?
Differences between Belgium and France
Today's biggest commercial challenges
Building long-term customer relationships
What makes a great salesperson?
Finrack's commercial objectives
The future of Finrack
Finrack's greatest strength
Closing remarks
