Standard Chartered Bank has inked a partnership with Taulia, a US fintech, to extend working capital to smaller companies operating within global supply chains.
Michael Sugirin, the bank’s Singapore-based global head of open account within its trade product team, says the bank has been streamlining its fintech relationships.
“We’ve rationalized our partners,” Sugirin told DigFin. “We’re trying to pick winners and add value, and go deep with them.” He cited Linklogis in China, a fintech in the logistics and real-estate space, and Infor Nexus, a cloud software provider, as examples. “But Taulia is a new partner because of its reach, and because it complements our other relationships.”
Access to working capital
Taulia provides working-capital solutions, enabling smaller companies to access value tied up in their payables, receivables, and inventory. It says it has about 2 million businesses on its platform and processed $500 billion in 2021.
Its fast growth is attributed to the huge need of small businesses in emerging markets that lack access to affordable capital. The Asian Development Bank estimates this region’s small businesses face a $1.8 trillion gap between the financing they require and what they can get, says Sugirin.
Standard Chartered can leverage Taulia’s business-facing platform to provide working capital and credit to these companies, which otherwise would be difficult to analyze or reach. Taulia enables the companies to piggyback off the credit rating of the anchor multinationals at the heart of a given supply chain, usually companies in North America or Western Europe.
There are other fintechs that provide this connectivity, but Taulia was also acquired in March this year by SAP, the enterprise-software giant.
“Taulia lets us go deeper [into supply chains] and fund these companies,” Sugirin said. “Their technology, plus the SAP acquisition, means we can establish more rails to reach more clients.”
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The SAP relationship is especially valuable to Standard Chartered because the bank’s SME relationships are mainly in Asia, Africa and the Middle East. SAP is a major software provider to companies big and small in the West. Now the bank has a means of pitching multinationals using SAP to supply capital to their suppliers in emerging markets, or even help them find new SMEs to work with.
“We can match SMEs in Asia to their platform, and help connect them to anchor companies in the West,” Sugirin said. “This enables us to provide financing to those SMEs, and we can look at other suppliers on Taulia’s network to offer them new working capital. This gives us an opportunity to chase the SAP ecosystem.”
Thomas Mehlkopf, part of Taulia’s leadership team in San Francisco, said in a press release, “We believe that all CFOs should focus on their cash strategy to ensure growth during these turbulent times and our partnership with Standard Chartered will deliver cash when and where it is needed, especially in emerging markets.”