Finance Indaba 2018 Q&A: InvoTec's Cuan Hopley

Cuan Hopley is the chief operations officer at InvoTec - the parent company of two fintech solutions called InvoSet and Bizcash, both recently acquired by Investec. They have confirmed their partnership with the Finance Indaba 2018 for the third year running. Cuan talks to CFO magazine about the origin and growth of these companies, as well as what participating in the Finance Indaba means to the group.

Tell us a bit more about InvoTec 

A: The mandate for InvoTec is to invest in and develop financial products within what is commonly defined as the fintech arena. Many fintech companies worldwide are aggregators and would work with multiple financial institutions on an affiliate type revenue model. In our model, we are the principal lender to our client. 

Ease of use of our online system and fast turnaround process has enabled us to rapidly grow a loan book in a very competitive environment. The back-end tech enables us to seamlessly transact with our clients which allows for enhanced speed and accuracy throughout our process. 

We essentially offer three distinct products:

  • Local supplier payments
  • Working as a financial intermediary with both buyer and supplier to extend the working capital cycle to meet the needs of both businesses 
  • A revolving credit line designed to obtain advances on unpaid debtors invoices 

Investec, through one of its wholly-owned subsidiaries Reichmans Capital, took the initiative to seed fund the business virtually at inception and in April this year, they acquired 100% of the business from the original founders.

We now fall into a grouping of operational business units that fund the whole working capital spectrum for small to medium sized companies / the mid-cap market. These companies are generally private and owner managed by entrepreneurs and have enterprise values anywhere from R10m well into the billions. 

I joined InvoTec as employee number three, so from being involved from the early days to seeing how far we have come today has been a remarkable trajectory to be on. I’ve always been interested in technology as well as financial services, so being able to work where I could combine the two was a ‘no-brainer’ for me.

The biggest challenge facing businesses across South Africa is cashflow management, and it is great being part of such a dedicated team who work to help companies solve this problem every day. 

So what solution does InvoSet offer?

A: At the heart of what InvoSet does is trying to solve those pain points that so many companies in South Africa have at the moment, and that is lying awake worrying about cash flow, about making the VAT payment tomorrow, or how to pay salaries this month. A solution like InvoSet can really help smooth over cash flow and let businesses focus on growth. 

The journey we are working on is to give clients an alternative way of financing their business that is seamless, completely transparent and flexible. The market is ready to move away from outdated models and do it better. At InvoSet we often ask 'who invented 30 days?’. In today’s climate, many of the biggest players are trying to push their payment terms even longer, to 90 or even 120 days. This is suffocating a lot of suppliers that have great products or businesses, but are being stifled by these terms.

Our product is a platform for invoicing. Suppliers and buyers can come together and transact on the platform, and in one transaction we are able to help both parties manage their cash flow.

Suppliers get cash-on-delivery payment with a small financing fee, and the Buyers can choose their own extended terms from 30 to 180 days. Our clients love the flexibility and speed that we provide through our user-friendly platform.

What has joining Investec meant for you?

Joining Investec has presented the opportunity for me to transition from CFO to COO, giving me a chance to focus on continually building up our innovation and the business process integrations around it. Our team has embraced the transition too - having moved into the iconic Investec buildings in Sandton, Durban and Cape Town and gaining access to the exceptional shared services and support systems within Investec makes it so much easier for everyone to go the extra mile every day.

We have a strong belief that a lot of the players in this lending space could be doing more and we are now able to leverage off the power of the Investec brand to achieve this.

It is really incredible to get people thinking about alternative finance in a different way, and for us to build Fintech products that are the future for how people transact.  

Why are joining Finance Indaba again this year?

A: We’ve been involved with the Indaba from the ‘get-go’. It just makes sense for us – especially with the Fintech stream. The event is showcasing the different avenues and different products available out there to financial managers, finance teams and CFOs that attend the Indaba. So, it is an opportunity to get our name out there, and a fantastic platform to showcase our technology. 

Finally, it is also a chance to learn from other people. We've had dealings with other vendors or service providers at the Indaba, operating in different markets or with another focus. Sometimes these are products that can add value to our service, or even support us from an operational perspective.