Twinco Raises $12M to Tackle Trade Finance Gap

Twinco Capital has raised $12 million to address a $1.7 trillion trade finance gap.

The Madrid-based company announced the Series A round on its LinkedIn page on Tuesday (January 24th). It was led by Quona Capital with help from existing investors Finch Capital and Mundi Ventures, as well as a venture debt portion from Zubi Capital.

“With this important milestone, we want to accelerate our expansion in major mining countries and strengthen our technology and data capabilities, especially related to ESG,” the company said.

The $1.7 trillion gap is widely reported to reflect the gap between the demand for trade finance and the supply of that finance. Small and medium-sized enterprises (SMEs) tend to be hardest hit by this gap and often struggle to find financing.

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Twinco co-founders Sandra Nolasco and Carmen Marina discussed this issue in an interview with PYMNTS in 2021.

Their company works with corporate buyers who want to start a financing program with their vendors and offers those vendors financing in purchase orders instead of invoices.

“Traditional methods of supply chain financing are invoice and therefore payment terms only,” Nolasco said.

“Purchase order financing means reducing financing costs throughout the chain, not just shifting the burden from the buyer to the supplier.”

She argued that purchase-order financing gives smaller vendors the financing they need to access the raw materials and produce the goods to fulfill their orders.

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Relieving working capital pressure early in the production cycle can strengthen their financial position before the company ships an order and risk payment delays.

This type of financing can work alongside other financing methods, Nolasco added, but SMEs, especially in emerging markets, often face a lack of options when traditional banks are unable to serve small-scale borrowers.

Twinco’s new funding round comes at a time when digital technologies are driving innovation in trade finance, enabling faster decisions and streamlining the process.

“Previously, trade finance was bogged down in lengthy risk assessment and underwriting processes, and access to credit could take days or weeks, especially if a business was doing it for the first time,” PYMNTS wrote earlier this month. “But as the digital toolset used by banks and their partners has grown, the lending process is increasingly accelerated, and many trade finance loans can now be approved and disbursed on the same day.”

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