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AutorenbildJuan Diego Parra Castillo
25. März 202118 Min. Lesezeit

We are nothing like Greensill says Frankfurt-based Traxpay


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This blog post first appeared first on old medium publication (https://medium.com/startuprad-io), and was moved to this blog with the relaunch of our website in summer 2024.


We are nothing like Greensill says Frankfurt-based Traxpay


Supply chain financing became a bit shady with Greensill, but it is totally not. It supports the whole economy.Markus Rupprecht, CEO Traxpay

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The Founder


In this interview, we talk to Markus Rupprecht, (https://www.linkedin.com/in/markusrupprecht/, https://www.crunchbase.com/person/markus-rupprecht) CEO of Frankfurt-based supply chain financing fintech Traxpay.

Markus has vast experience, even before his time at Traxpay, for example, he has been with Deutsche Bank, Software AG, or Hitachi Consulting.

This is kind of a follow-up because one of the first interviews of Startuprad.io was with Markus’s Co-CEO (at the time) and one of their investors, published in October 2014 here on Startuprad.io.

You have on the supplier and buyer side ERP systems, but in payments, many of the information is lost.Markus Rupprecht, CEO Traxpay

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In times of XML it should be much easier to send information with bank transfers. … 140 characters are not enough for businessesMarkus Rupprecht, CEO Traxpay

The Startup


Traxpay aims to be the Swift of supply chain financing (https://www.traxpay.com/ https://www.crunchbase.com/organization/traxpay). They are working on moving information with the money along the supply chain. They are utilizing the ERP system of the buyer and supplier in the supply chain since both sides are highly likely to have an ERP system. They work with the invoice information in the ERP systems. They to get receivables either earlier with a little discount (dynamic invoicing) or help to provide information to finance it with a bank.

Traxpay is headquartered in Frankfurt and was founded there back in 2009.

I realized that there is a big gap in B2B payments. … If you pay a lot if invoices you need a lot of information, not 140 characters you can have in a SEPA money transfer.Markus Rupprecht, CEO Traxpay


The Video Interview is set to go live on March 23rd, 2021, at 17.00 CET (Frankfurt/Paris/Zürich)



The Audio Interview

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The Interviewer

This interview was conducted by Jörn “Joe” Menninger, startup scout, founder and host of Startuprad.io. Reach out to him:LinkedInTwitterEmail

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Transcript

Intro


[0:00] Music.


[0:08] That I owe you were podcast and YouTube blog covering the German.


[0:13] Music.


[0:20] Hello and welcome everybody this is Joe from startupradio your startup podcast and YouTube blog from Germany as well as the host of the world’s first internet radio station dedicated to startups and Techcompanies if you like to learn more good down here in the show notes wherever you listening to this or watching this they’ll be a linkto a website or to our link tree link and there you can find,all the options to subscribe to like us and if you haven’t done so make sure to like And subscribe buttonwherever you are consuming this today I would like to welcome Marcus hey how you doing I told.It’s a pleasure to have you here and admittedly this is a kind of follow up when I started out with startupradio do I made an interview with one of your investors and your former co coseven years ago it was published in October 2014 at the time when I was not really.


[1:23] Publishing on a regular basis nonetheless this is a little bitlong-term follow-up here just to make sure everybody knows so as people can see you are the CEO of traxpay and we made this interview for special reason because

Markus — The Founder


[1:40] thethe greensill insolvency kind of Tainted a little bit everything that is related to supply chain finances so instead ofjust talking about your CV your business your company and so on so forth.We are going to dive a little bit deeper in what you guys doing and why you guys actually different from them ofand of course we use a lot of special terms and everybody would like to learn more good down here in the show notes to our blog post and there will have a link for further readingsand there you’ll find all the explanations of everything almost everything we’re talking about like special terms so you are already for quite some time.


[2:28] At traxpay but,I’ve seen you you had quite an interesting life before that you’ve been an assistant vice president for more than a decade with Deutsche Bankyou have been with software I gave one of the big software companies here in the right mind area you’ve been with Hitachi Consulting and then at one point you ended up with your own startup can you just give us a brief overview,how this happened why did you set up traxpay and what was kind of the incentivedisclaimer it within this year apparently most of the startup founding stories involve either bar or wine.


[3:11] Oh and we may add to the people that thanks to your daughter who’s doing Tik Tok you have an awesome light there.Sometimes this really helps in these times I’m thanks show I’m really I’m very happy and pleased that you invited me to be here.I think first of all I have to you know make clear that I was not 10 years at Dodger as assistant vice president because there’s typically means you are not very successful.So actually you know I started my career torture and you do this typically in German as an apprentice.And I then moved moved on and finished as assistant vice president.But to be honest I always wanted my own business and I always wanted to create a startup.In those years and we are talking you know actually in the last decade.


[4:10] Last Millennium there was not a lot of fantasy for a banker to have a start-up you know this was way before fintech.Just what so I was actually sitting there and realized that I can’t code and realized that the only thing I can do is banking.I was also quite sure that after my last adventure Deutsche where I kind of had my first startup within the bank you know we,he founded a business consultancy which was my last task and so there was a little sniffing in you know being self-employed and having your own business.


[4:46] But you know after 10 years I decided you know if I if I now don’t leave the bank I will stay there forever.And as much as I think that I’m still a banker and and think like a banker you know I just wanted to do something different,so I then moved on and did you know roughly 10 years of consultancy you mentioned the major points with also G of T but software AG.And then he touchy Consulting.


[5:12] But you know I D I realized it Consulting is not really very interesting business because it doesn’t scale.You know it’s kills people but not beyond that and so actually at a tea touchy Consulting I developed the idea of traxpay.I was even at the stage where he touchy Consulting was about to implement this.And then you know a lots of Japanese flew in from Japan I mean this is a good sign when they come to visit you.And they listen to my idea and everybody was quite excited and then the you know the old guy in the room.And was looking at me and said well Marcus it seems like everybody’s thinks this is a good idea and you know I was you know kind of positive so nodding.And then he said and this is really true he said but how can this be a good idea if you’re not Japanese.


[6:07] And so you know I always heard the story I never believed him but they killed they killed the idea because I was not Japanese.And you know honestly after that I was really kind of yet just this isn’t the place to be because I don’t want to do Consulting I want to do some scalar businesses.


[6:26] You know the interesting side effect is that heat up she Consulting was actually really found because of that they are going to build services.Alongside alongside the idea really hardware and that they are building.So as I was not Japanese I thought you know my career is not really going to prosper with these to this Japanese company,so I said okay if I don’t do it with C touchy I just do it by myself and I found a traxpay.


[6:56] Ah I see that’s a very interesting story and traxpay.


Traxpay — The Startup


[7:04] You found it in 2009 so almost 12 years ago.What was the idea behind it and at the point he founded the company what was.Where was the thing that the final Vision you had and how did it turn out to the truth how they it vision and reality collide.Well pretty much so you know when I when I did this.I was really in all the times the last last year’s a torture but also then.My whole career as a consultant with different companies I was always looking at payments and there was always looking at Treasury.


[7:55] So I was contacting bangs I was Consulting large corporates large Treasury Department and I realized that there’s a big.Glitch in the big problem in B2B payments which is not astonishing because you know when you look at the Innovation and payments it always comes from B to C.


[8:15] Having said that you know there wasn’t a lot of innovation taking place in payments.Not looking at blockchain and obviously what derives from that because I think this is really some very new stuff and new innovation.Which again derives or comes from from p 2 c not b 2 B II still it will still take sometimes until corporates will pay via Bitcoin if it ever happens.So everything that is new comes from B to B comes from B to C.But the point is that in B2B you have very special requirements so I said well you know if you pay invoices and you feel pay invoices on a larger scale like not one invoice but 100 in voice over 1000 invoices,you need a lot more information and you know in Germany we have to reference field with a hundred forty characters in England you used to have 10 characters and it really it’s never enough but in times where you know data is not limited anymore.


[9:14] I said well you can use whatever kind and amount of data to do that.And so it shouldn’t be limited and this is why we initially met 38 just,at that you’re talking about like the 140 characters you not talking about Twitter,you actually talked about the paper slip that you that he used to fill out for transfers payment at your bank and you then through it,into the mailbox of the bank they checked your signature and then they transferred the money so that that’s the limit you talking about because we’re like yeah like,eighty percent of the people listening to us have never had an experience with German banking especially so so far back in time.No that’s that’s true but that show the point is that even if you do you know transfers today,mg amount of data you can put into that if it’s just you know paper slip or if you do online banking is also limited to this characters because the bank’s just said well it’s a hundred forty so we stick with them.


[10:20] Now obviously in olden times and especially.Since we know about XML you know I said well it should be much easier because you have you know open Tech reference you can put whatever India you want and then closed tag reference and it should be it.So there was no necessity for that apart from the fact that obviously new banks have agreed on it’s a hundred forty characters in Europe so we stick with that.


[10:46] But again it’s not enough for business purposes and we said we need to do this differently,and luckily at a time you know we had a very strong exchange with sap and namely at that time Jim Hawkins neighbor who was the CEO.


[11:04] Because he said you know what you guys are doing is actually great because if you look at it again from a business perspective.Qf on the buyer side and Erp system you know be it sap or others and you have on the supplier side and VIP system,and they have a full reference and fully documented the whole business processes but whatever comes to their payment.It’s like entering a black hole and disconnect is gone so he said if you are able to do what you want to do.


[11:38] It opens up a whole can of possibilities when it comes to and we are now at this topic to supply chain financing.Because you know if you think about what is happening there that you pay invoices earlier,no matter how and when but you know just use the typical example,often invoice that you know 10,000 Euro and it runs for 20 days and at an interest rate of 2%,it doesn’t come to a lot of money and Emmanuel cost to really.Trends for change this invoice and change all the processes around it to pay it early and maybe use a little discount on all that is much less than this 80 Euro debt you know their manual thing you have to do around that,is causing so his that doesn’t make sense but if you are able to automate this.It doesn’t matter because it’s fully automated its full STP fully digitalized and it doesn’t matter so he actually you know initiated this whole idea.


[12:49] How about if you do this it opens up a whole new can of possibilities not a can of worms.And and this is you know when I came back to traxpay 5 years ago.After you know I was away for three years and in the meantime it wasn’t you know too successful,BB I came back and said well use this because we have to our technology we were there we hear you know easily integrating to Erp systems,which is also something that you know some some some some people can’t do really well,we had two big big opportunity to work on the dress sap and themselves at the time so I came back and said okay let’s use this idea from Jim thanks Jim,even today,and put this into a supply chain financing because supply chain financing acid core at its core really,helps the economy and now with greensill you know it kind of got into this you know Shady atmosphere and it’s totally not because it just supports the economy,that you know just smaller suppliers also bigger suppliers in oh have the ability to get money earlier,and Easter Catch-22 situation and liquidity.


[14:10] Enter larger Pious you know who sometimes you know just pay later have long to payment terms you know do this because they want to strengthen their kpis,so it’s really for the benefit of the both parties and this is very good for the whole economy,don’t let let me kind of wrap this a little bit up with you guys are actually doing because my understanding is you are enabling digital invoicing,from GOP two-year P system without going through the banks and the 140 characters limit is that true,no you need it has evolved since then so we are not doing digital invoicing.Actually our process starts when the invoice has hit or been entered into the Erp system.So we don’t care however the invoice gets there it might be electronically it might be that some people key it in however it gets there but when it’s in the Erp system.


[15:14] And when the Pia says okay I’m going to pay this invoice but maybe in 60 days,no we step in and say okay now we have different means to pay this invoice earlier.And one mechanism is that the buyer into supplier bilaterally agreed to pay the invoice early with a little discount.


[15:36] Which is cold you know dynamic discounting.Or in other means where you have not very liquid bios as I can or want to pay this early so we bring in another party which is defined in cheer the bank,ribbing says okay the Abaya if you tell me that you are going to pay this invoice in 60 days.


[15:58] I’m just paying out the invoice now with that little discount to your supplier he has the money early and you give me the money.So those are did you know this is the one bilateral party dining room discounting part and the other Bond reverse factoring part were a third party the bank steps in and says I’m going to bridge this liquidity,understood we may add for our audience because not everybody has a btb background that there are,many many different types of invoicing and payment terms but it’s,because Germany is very industry heavy and we deal in lots of machines.Time to be produced not really digital and so it’s not uncommon that you have like millions or tens of millions that are paid out like in 180 days from now,yes to and when you think about that size that those terms like 180 days you really get where the opportunity is in there,especially in Germany heavy industry Automotive large amounts and long payment terms cool but you know honestly though I think if you look at the payment terminals globally.


[17:14] And there are lots of studies out there we are really you know in the Midfield of of the country so there are countries that are you know have very long up in a payment terms than we do in Germany.We have countries where it’s shorter there’s actually also a law in Europe you know that prevents the company to pay after 60 days or have longer payment terms than 60 days.But this can be you know circumvented and I some some special situations,so everything exists and is out there and at the end of the day you know some some suppliers a happy to deliver large corporate even if they get paid after 90 or 120 days because they are just good customers.And so it really varies and we have we have seen everything,

Why Traxpay And Greensill Are Completely Different


[18:03] I see and let us get a little bit back to the topic of what you guys areactually doing because we’ve been headlining this traxpay says it’s you we are nothing like greensill can we dive a little bit into,what you guys are doing differently than greensill so you know I think first.If you if you look at the comparison we wouldn’t compare to greensill because greensill was a fund.


[18:42] That was packing up a supply chain financing platforms.


[18:47] So if we would be an in our case we don’t use funds and we don’t build.And issue notes and put them out to Market and then green cell or others are buying them.And we are backed by the house banks of the large corporates and this obviously adds a lot of you know security to the whole system.Because what you want in the system you want to have to liquidity and you want to have to certainty,debt if a supplier wants to be paid earlier he will get the money.So greensill was pecking other platforms like us,and now they have those issues because they they are clients promised their bias hey I promise that we will set it to notes and we will settle your invoices that you are going to refinance.And now if and actually greensill was backing some of them in a big way you know if they drop out this whole supply chain is at risk because the liquidity is gone.


[19:57] And so you know greensill was a fund.Debt provided money to the system like in our example.


[20:09] Would be taken by Banks and as it’s much more secure if you have a bank with a credit line.Then selling invoices in the market by the way it’s also much faster and it’s a different scheming a different mechanism.So you know we did read a lot about greensill and how they affect supply chain finance and how shaded it is.And really to shadiness is within the fund.


[20:38] So it’s nothing to do with supply chain Finance because as I expressed earlier I think it’s really benefiting.Everybody in the market it’s benefiting you know large Banks,it’s benefiting large corporates and it’s also benefiting small corporates to suppliers,so this is really where the whole idea comes from to make supply chain better more sustainable and more reliable,but only obviously if the fund that backs this up you know Ghostbuster has a problem the whole system has a problem but as I said we are voices because we only work as Banks,and they are you know very Savvy and very stable most of the times,at least the bank’s we are working with I don’t see an issue in the future I see so basically bottom line is the greensill fund it bought the receivables from like.Some of your competitors who do the papers because they bought from a large corporates Tobias,and it’s the pavers so they bought the pavers and this is how it happened but then as they went you know bust it kind of.


[21:54] Really doesn’t make the whole system better and more secure yeah we just met ad that you cannotby all the pebbles for the same amount so you have to have some discount and at the end they refinance it by issuing some bonds and it was lot of financial Engineering in between going on that you can have all thosepayables put into bonds which then apparently,got bought by some financial institutions including but not limited to credit swiss but I do believe there will be much more appearing in the news in the specialized news over the next,next year also bottom line is greensill with financing they used a lot of financial engineering but you guys,have you been working with greensill in the past never because you know we always said for us it’s.


[22:53] You know it always comes down to and we have seen just in the financial crisis you know you can always you know maximize your income and then you maximize the risk and sometimes hear or see,maximize the potential of criminal incidents so we always said now we must make sure,did our clients can Bank on their funds and you know best way to bank on your funds bank with your bank,have you got any feedback from Banks since greensill that they asked hey guys are you doing the same stuff or with a clear tooI assume you work with a specialized departments within the bank was it always clear to them that you guys are completely different,now it’s you know for the bank’s we work with it’s very clear that we are completely different because they obviously understand the reasons,I mean everybody in the bank you know we have had this.Just crisis before which also happened because of bundling Andre bundling of all that so you know you might think that people learn the lesson.Sometimes don’t but especially the banks who work with us and know the difference and have understood this.On the client side obviously there was some.


[24:14] How should I say the some uncertainty and questions but it is easy to explain that this is exactly why we work the way we are.So now we see a lot of.Benefit I have to say from the case that has happened there because now for the CFO in our security is even more important I mean.Yeah you have to look at the description the top description of her CFO this is about avoiding risk.


[24:43] And so the last thing they want to see is something happening like this,obviously you know the whole industry with supply chain financing platforms is,you know very new so people have to learn what it is and obviously those platforms don’t go out there and say Hey you know that you might have a risk that we can’t sell your invoices we become place your notes,so they obviously go out and say you know you can be very sure this is all very great and very safe and we see it’s not.


[25:15] And so we did have a lot of questions I think the answers and pleased our especially prospective clients a lot.And so we do see you know a lot of traffic and a lot of positive impact for us having said that you know it’s really tragic what has happened there because a lot of people will lose a lot of money,unfortunately and this is always you know something that we must really work on to avoid.So Marcus look looking now into the future what do you guys want to be where do you see future opportunities,thanks for asking that Joel you know I think first of all it’s important that we have a very strong platform like this in Europe from Europe.


[26:03] So you know all our main competitors do reside in the US,so I think it’s good to start something here we know all data is key and from data we will have a lot of additional businesses coming.But to put it you know in a really short and crisp way we are striving to be the Swift for supply chain financing,that helps Banks and corporates do you have a few words on yourOutlook what you guys are expecting for the future because in Germany we talked about it you can find itin the show notes that there was a special law in Germany in 2020 you didn’t have to file for insolvencyif your troubles came from Coronado you first see a wave of insolvency how is your outlook for like Germany and what are your like the traxpay plans for the future like conquer the world or stuff like thatactually you know we never had to care about the insolvency insolvency issues around Corona because,we’ve never had risk we have since I came back never had any really Financial situations where we had to look at this.


[27:22] Risk her owner or without especially best investment of Deutsche Bank in notice obviously has gotten much better and even more stable and now that many other Banks see the benefit of working with us.And it was obviously also a very you know huge signal that one of the largest supply chain Finance in Bank.Which types of bank is teamed up with us and you know partnered with us,we also see a very prosperous future well only things left for me to say best of luck for Conquering the word with traxpay with pleasure having you and hopefully the next follow-up.


[28:02] Well not take like.


[28:05] Will not take like seven years oh cry I promise you know we can I’m happy to do this on a more regular basis.I think there are very you know interesting news that are coming up in the recent times it might even be worse looking at this issue Stan again,but I’m really looking forward to keep in touch and thanks a lot for inviting me thank you pleasure was all mine.If you are a professional looking at the European startup scene Germany is a place you cannot miss.


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[28:49] Each week most likely you have never heard or read anything only startups before an English but you will in the future be ahead of the curve And subscribe to startupradio.


[29:00] Music.


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