Trade finance technology: New funding to help BuyCo link TMS with trade finance – JOC.com

The market to link core logistics data and systems to trade finance options for shippers is growing, primarily as a way to avoid the letter of credit process. Photo credit: Shutterstock.com.

Global transportation management software (TMS) provider BuyCo has landed an investment from French financial services group ODDO BHF that will also entail the two entities developing trade finance products for BuyCos shipper customers.

Terms of the investment were not disclosed, but BuyCo said the funding from ODDO, announced Monday, brings the total investment into the Marseille-based software provider to 6.5 million euros (US $7.9 million) since its founding in 2015.

BuyCo offers a cloud-based TMS that allows shippers to plan, book, and monitor international container shipments while coordinating activities with suppliers, customers, container lines, and forwarders. Shippers in nearly 60 countries including drink maker AB Inbev, French mining company Eramet, fruit grower Blue Whale, and food manufacturer Andros use the platform to manage a collective 300,000 containers annually.

The company will use the investment from ODDO to grow its team this year by about 20 percent, to 50 employees, as well as link BuyCos shipment execution capabilities with financing options from ODDOs international banking unit, BuyCo CEO Carl Lauron said in a statement.

Lauron noted that banks responsible for underwriting the financing of goods in transit rely on documents produced and submitted by logistics practitioners to make risk determinations. Because those documents are submitted in different formats and often submitted offline, this can result in financing decisions that delay payment to cash-hungry suppliers as banks make those determinations.

Our goal is to get the players in the physical and financial supply chains to work together to make this documentation consistent from the start, he said.

BuyCo and ODDO intend to focus on improving the current process of issuing letters of credit, a financing instrument that accounts for a significant portion of global trade.

Florian Witt, divisional head of international banking at ODDO, said the goal of the investment and product development with BuyCo is to offer our clients a collaborative platform solution where logistics and financing of a transaction go hand in hand, he said in the statement.

The collaboration between BuyCo and ODDO is part of a broader trend of linking logistics systems and data to trade finance products, primarily designed to alleviate the container shipping industrys reliance on letters of credit.

The thinking behind these tools is that entities that either can provide detailed historical and real-time information about the condition and whereabouts of shipments to financiers can help suppliers get access to capital outside the letter of credit process. Theoretically, that information reduces risk for the financier or enables software providers, container lines, or logistics service providers to act as a financing layer between the bank and the exporter.

Contact Eric Johnson at eric.johnson@ihsmarkit.com and follow him on Twitter: @LogTechEric.

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Trade finance technology: New funding to help BuyCo link TMS with trade finance - JOC.com