[ Gentle music plays ] Now let's move a little bit to something more visual. So looking at the platforms, so here I just have some examples in the market. So one is C2FO is a provider for dynamic discounting, PrimeRevenue company I worked before, they provide accounts payable financing and you see it's always very similar. So you have for example here this is where the supplier logs in and here you can see okay these are my payments due which I can get in one to seven days and six to 14 15 to 21 and basically most platforms are based are web-based, so you don't need any software as a supplier to log in, also as a buyer. There's no real software, you you go online and as a supplier you have kind of several options to to sell your invoice. The first option is to select single invoice, so basically you have or maybe I have another screenshot, yeah here see you can select specific amounts. So here's an invoice amount an invoice number, so this is $12,000. The due date I don't know October 13, you want to get paid on August okay. So 60 days payment terms you want to get paid on day five or something like that. So you can you have a list of invoices one invoice, two invoice, three and you can manually select which ones you want to get paid earlier, and of course, you can select the date you want to get paid earlier. The second option is some of them are providing that where you can say like," Hey I need $1,000,000 right now." So the system calculates which one is the nearest figures, which invoices you should combine which gives you $1,000,000 right now okay. So select an amount and the third one where banks and platform providers they log the most is, of course, the auto trade auto trade. So basically this feature kind of allows the supplier to every time invoices are approved and pushed into the system by the buyer the system automatically sells these invoices and the supplier gets paid. It can be defined it can be paid at a specific date or as early as possible [Voice: You say sell invoice so that's the supplier?] Correct sell invoice means the supplier is selling its invoices to the funder or the buyer to get paid earlier correct. Now as I mentioned before a lot of platforms today not all of them are supporting reserves, credit notes it's important point languages, so as you can imagine you're not only dealing with suppliers which speak English. So some of these platforms I know supports like up to 10 different languages where you can select your language preference and everything is exchanging or some companies they want to kind of customize this with their own colors with their own logo, so when you log in as a supplier it looks like a this is the platform of Coca-Cola, and then some companies they also create some very powerful reports. So you know at the end of the month the buyer wants to know hey how many suppliers traded their invoice? How many supply-- what what was the amount of invoices uploaded? How much was traded? So all this information is important also reconciliation. So at the end of the months you want to know how much has to be reconciled, then of course, you need also similar to the languages you can depending where the suppliers are located different currencies different rates. So some platforms you can define specific rates per supplier, different rates per supplier group okay. Then what is also important especially specifically with dynamic discounting is how you manage VAT, so do you deduct the invoice sorry the discount plus the VAT or minus the VAT or so you have you have a diff-- a lot of different options how to do that. Also what is important some platforms like, let's take an example. In most cases I mean not in every case but in you have here different funders and here, of course, many different suppliers. So how you deal with that? Is one founder managing one buying entity? Or managing one supplier? So how how you streamline all these funding and all the payment advice to the supplier? So it can be very very complex. There are programs where you hear about 10 different funders, different type of banks, different pricings. So it can be very very complex [Voice: So buyer can have different funders?] Yeah the buyer would say hey I have basically can be the buyer says like hey," I have three relationship banks. I don't want to give all the business to one bank," because if I give everything the funder they will have a problem with me and we have a long term relation, so they share that or they have a program in the US, Europe, Asia so in Europe the French bank will be more powerful or have cheaper prices than the US and etcetera, so you share that. Then another feature as we mentioned before is some platforms what they provide kind of callable-- capabilities is a dynamic scale. So depending on supply chain finance fee, so no sorry this should be here, this is supply chain finance fee and here's a timing. So if you want to get paid on day five then so very early then the discount rate is higher than if you want to get paid on day 30. Now C2FO the company here shown on the screen, they have kind of a different model where they say let's apply kind of not it's not a eBay model but it's based on the amount not only on the timing but based on how many suppliers want to get paid earlier, the price goes up. So let's say if you have here 30 suppliers want you to get paid earlier and here you have suddenly five suppliers, so the demand for for payment is lower than here. So demands goes up the volume of financing goes up the price goes up. So they have a real dynamic model based and specific threshold which the buyer can set up and then based on the demand from the suppliers [Voice: So the more supplier the higher the fee] correct so I'm I'm not sure if this type of complexity it's really created an additional value for the buyer or the supplier but this is what they provide. Another platform FinTech provider by the way just to give an example so C2FO their clients are like Walgreens, Costco, UPS and which is all dynamic discounting, so self-funded programs. PrimeRevenue they have clients like Volvo, Kellogg's, Michener, Toro, Sainsbury's to name the ones which are public. Demica has Auchan, Taulia Coca-Cola for example and they provide dynamic discounting also so self-fund the programs and also a third party funded programs. Then here an example of a platform from a bank, so this is Westpac which is a Australian bank and they use kind of their own platform or I think they use a platform from another bank but just to give you some some ideas. Then there's one I couldn't find a screenshot it's called CRX market quite a new player. They are based in Munich in Germany. So what they provide is a solution where there's an auctioning. So basically the platform every time there's an invoice the banks kind of like eBay they quote their price, which is kind of a strange because let's say and by the way they have clients like Nestle, Lufthansa that just recently got Daimler. So basically it's always the same risk it's always Daimler, correct? So why should the price change? But based on different funders the one with the lowest price gets the business which it's a little bit problematic because first of all again it's always the same credit risk, so why the price should change. The second point is for bank to provide funding to take the risk on the buyer they have to put they have to put reserves on their balance sheet and this can be let's say they have a credit line for 100 million. There are some research behind on the bank okay. So basically they can provide credit risk up to 100 million, but now with this auctioning model they don't know, maybe today it's 5 million tomorrow is 90 million. They want to know ahead how much is it because if it's always 5 million then why have such a high credit line why not-- reduce it to 10 million and then you can reduce your reserves which are costly. So it's why they don't like so much this model because they never know what they get and it's also kind of time-consuming, you always have to check in the system what are like kind of eBay, you never know if you get the goods or not. If you win the auction [Voice: So the reason the buyer would want this because they know the rates and they want...] it's kind of sold as that you get you have a marketplace where there's competition, but you know you can also do that by having without auctioning that you review it like I don't know on a yearly basis is the price because we saw early today the price is going slowly down, maybe goes up again with the interest rates increasing, but you can review it like maybe half year every year if the price is correct, the price can change but not like real time based on the auctioning doesn't make so much sense. What is also interesting in terms of development it's like Demica they came up with [Clears throat] with a kind of a new feature which the others are not providing right now, it's whereby if you are a Chinese let's say a Chinese supplier and you provide goods to your to your client here in the US, let's say it's it's a is a Nestle no let's say a US company its General Mills okay. General Mills pays in dollars, let's say $100 to the Chinese to the Chinese supplier okay, however, no this is wrong, maybe I do it a bit different to the Chinese supplier pays in dollars, however, the Chinese supplier has their costs like labor, rent, machinery and suppliers is Renminbi okay. So with supply chain finance before it was 60 days now they get the money let's say on day five they can reduce the FX risk of changing currency by 55 days but they still have this five days kind of risk in this example. So what Demica provides is they work with another provider which provides like FX exchanges where you can you can sell dollars into Renminbi and for a fee which is kind of a new feature which is interesting, just also to give you some perspective on the figures. So the official figures for example for PrimeRevenue they say they have a I think about 20,000 companies using that system. For Taulia they use the figure 1 million 1 million company using this platform, Taulia. So I mean these are just marketing figures I don't know if these are correct or not but this is what is used in terms of sales marketing. So it's quite substantial and this is suppliers and buyers, of course.
