Software to enable invoice finance at scale for SMEs, optimising cash flow, fuelling growth.
Business overview
| Location | Manchester, United Kingdom |
|---|---|
| Social media | |
| Website | hydr.co.uk/ |
| Sectors | Finance & Payments Digital B2B |
| Company number | 12843859 |
| Incorporation date | 28 Aug 2020 |
Investment summary
Business highlights
- £6.5m of invoices funded using our software since launch
- >3,500 individual transactions powered by Hydr's software
- Signup takes around 15 minutes for SME customers
- Deeply integrated with the major cloud accounting providers
Key features
Idea
Introduction
A challenge faced by all small businesses is cash flow: for those that raise invoices, it is not uncommon to have to wait 90 days or more to be paid. A solution to this is invoice finance.
We have created software that we believe is revolutionising invoice finance by making it an attractive, accessible proposition to the SME market: our software enables 100% of the invoice to be funded for a fixed fee, the balance paid to the business in 24 hours. Better still, signing up for an account is completely digital, taking around 15 minutes.
Our algorithm makes funding decisions in real time - we even manage collections on our customers' behalf, saving them valuable time and removing the need for those awkward chaser conversations (which no one likes!).
Our integration with cloud accounting and open banking makes the ongoing management of an account intuitive and straightforward. Customers don't even need to upload their invoices - our software picks them up automatically.
Substantial accomplishments to date
o MVP delivered in May '21
o Product launch in May '21
o Became a 'Connected App' on the Xero platform, one of only a handful of businesses to be awarded this accreditation.
o To date, >3,200 invoices funded representing an aggregate value of £6.3m since launch (with a team of just three people in the business).
o To date, funding decisions by our software have resulted in zero bad debt.
o We signed an agreement with a major lending partner in September '22 enabling us to win more customers and present more invoices for funding.
Monetisation strategy
We have been trading since May '21. We charge lenders a fee for the use of our software.
Our next goal is to develop our software as a white-label proposition to sell to financial institutions, as we believe this will enable them to fund invoices of their existing SME customers at a lower cost to serve. We have commenced discussions with one bank about potentially trialling our software.
Use of proceeds
o Customer acquisition: 31%
o Product Development: 23%
o Team Build: 35%
o Other (office rent etc): 11%
Key Information
Share Classes
As part of this round a new class of shares is being specifically created in order to provide all investors with a 1x non-participating preference. The Founders will not benefit from this preference.
The preference means that, in the event there is a return of capital, investors will receive a return ahead of any distribution to the Founders up to the value of their investment, or, where there are insufficient proceeds to pay all investments in full, a pro-rata amount of their investment. Then, and only if there are any proceeds left over, these will be distributed amongst the Founders on a pro-rata basis.
Where investors would receive a higher return if the distribution was simply divided pro-rata between all shareholders, then the preference will fall away and investors will receive this greater sum instead.
As such, investors will share equally in the growth of the company, but if the company is unsuccessful then the return of their investments will be made in priority of the Founders.
The two share classes are otherwise equal in all respects.
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