With small business owners, especially online traders, finding it difficult to get access to bank lending, the potential for a startup to enter the field and shake things up is significant.
Iwoca, the winner of Wired Money's Startup Pitch Stage on 1 July, could be that startup. The company won the attention and crucial votes of delegates at Wired's inaugural financial conference after pitching its business "Dragons' Den-style" to attendees, alongside over 20 competing startups.
Founded in 2011, Iwoca started trading in March 2012 and offers online traders, such as the people who rely on eBay and Amazon sales for their livelhoods, access to capital "within hours", says cofounder Christoph Rieche. It has been named one of the top 20 startups by startups.co.uk and awarded a place on the European Fintech Top 50.
Iwoca's online credit application uses a trader's eBay and Amazon data, as well as data from other websites such as Facebook, to make a decision about whether or not to provide working capital. "We can see every product, we see their prices, their seasonality and volatility, and we can compare with their peers to get a relative understanding of their performance," said Rieche.
It's the kind of internet-aware lending that's considered by some to be lacking in high street banking; online traders have an online reputation and credibility that isn't always recognised by pre-digital institutions. "Only six percent of all retail sales are transacted online," said Rieche. "I leave it to your imagination as to where we'll be in 20 years time."
Follow the rest of Wired Money's speakers and our coverage at wired.co.uk/wiredmoney13
This article was originally published by WIRED UK
