An Interview with Angus Sedgwick, Chief Executive Officer and Managing Director, The Invoice Market


FST Media: What are your business and digital priorities for the next 6 months?

Sedgwick: Our key business priority is to continue to ‘inform and educate’ SMEs and potential referrers about cash flow funding, its benefits and competitive advantages to businesses over traditional funding sources.

FST Media: What are your business and digital priorities for the next 6 months?

Sedgwick: Our key business priority is to continue to ‘inform and educate’ SMEs and potential referrers about cash flow funding, its benefits and competitive advantages to businesses over traditional funding sources. The awareness is definitely growing but the potential is significantly greater than the current volumes. The Invoice Market (tim) is a leader in P2P lending having written $150 million of invoice transactions since we commenced business 2 years ago. Based on current volumes, we are projecting year-on-year growth of 150%. In terms of digital priorities, our website was recently re-launched, so it now offers significantly enhanced funder and client functionality via the timEx online portal. As a P2P lender, it’s important that the portal provides our funders with a comprehensive analysis of the risk being funded and for businesses or clients, a user experience that is reliable, simple and quick. In a business that is underpinned by technology, enhancing the functionality of the portal is an ongoing priority. To this end, we’ve appointed a US-based firm to continue to identify developments that will enhance the user experience.


FST Media: What role can start-ups play in helping drive Australia’s competitiveness of innovation in the fintech sector?

Sedgwick: It is really individuals with an entrepreneurial drive rather than start-ups per se that will push Australia’s competitiveness. Entrepreneurs are typically more innovative and offer different perspectives that change the way business is done. So challenging the ‘norm’ and looking for smarter, more efficient ways to do business or devising a completely new service or offering. Generally, these ideas are more easily implemented by new businesses that are more nimble than established businesses where standard procedures and systems are in place.


FST Media: What are the key things be gained from bridging the knowledge gap between businesses and investors?

Sedgwick: In a nutshell, tim’s ability to match investors (providers of funding) and businesses (the sellers of invoices) has opened the doors to new opportunities for both. P2P lending has enabled non-bank investors such as Self-Managed Super Funds and Sophisticated Investors to participate in debt funding, which has typically been the domain of large scale financial institutions.

On the other side, because these investors are unconstrained by traditional lending practices and they see the investment value of providing debt funding, many businesses now seek alternative financing as a fairer, more flexible and far more affordable solution. As evidence of this, tim has been supporting Australian businesses since mid-2014 and in that time, as one of the largest P2P lenders, has cash flowed in excess $140 million of invoices.


FST Media: What technology or innovation is proving to be the single biggest game changer for P2P?

Sedgwick: The biggest game changer for P2P lenders has been the technological advances that have enabled alternative financiers such as The Invoice Market, to quickly access data about the credit worthiness of debtors and rapidly process applications to cash flow clients’ invoices. Gone is the era of assessing reams of paperwork that could take days before approval is given. tim will usually cash flow an invoice for a business within 24 hours. Technological advances in credit assessment have without doubt been a game changer but caution is needed. At tim, we have chosen not to rely on pure algorithm-based credit assessments because they are not intuitive enough to pick-up bad deals resulting in unacceptable loss ratios. Our business practice is to use technology for 70 per cent of risk assessment and complete the assessment using the rigour of a real person. This has resulted in a loss ratio that is minimal.


FST Media: How do you encourage a culture of innovation in your team?

Sedgwick: We simply adopt the approach that “no idea is a bad idea”, which typically opens the door to bright ideas. As a smaller firm, our team are engaged with most aspects of the business’ operations and encouraged to continually seek to increase efficiencies and improve users’ experiences.


FST Media: What specific insight does tim bring to the Australian financial services industry?

Sedgwick: The demand by SMEs for funding within their businesses is growing, and this demand that is not being met by traditional funders. Businesses are increasingly seeking alternative financing options that have no restrictive ‘lock-in’ contracts or impact on their balance sheets. With this growing demand, we see a world of opportunity for the intermediary network, whether by helping existing clients or building a broader client base, there is the opportunity to understand the alternative finance solutions available and be a referral partner.


FST Media: How does tim engage with corporates across Australia?

Sedgwick: We think it’s important to engage with the banks, so we are in regular discussions and are building referral networks with them. As an example, tim is often used as an incubator funder for banks’ business clients who currently do not qualify for traditional debt funding. We’ll assist the businesses with their debt funding needs until such time as they do meet the criteria of their bank.


FST Media: Where do you look for emerging technology trends?

Sedgwick: At tim, we are always keeping abreast of developments within the international P2P lending industry, particularly the UK where P2P lenders are well established. Thirdly, it’s important to set measurable stretch goals for performance and provide incremental opportunities for employees to motivate them on this journey towards an innovation mindset.


FST Media: Who or where do you get your inspiration from outside of the finance industry?

Sedgwick: I draw great inspiration from three-time Ironman World Champion and Australian, Craig (‘Crowie’) Alexander. He has the ability to continually dig deep and deliver on race day. At the age of 42 he is still winning Half Ironman events, an incredible achievement in itself but reflective of his long term commitment and performance.