Pictured left to right: Andrew Bertolina, Avi Levine, Matt Gillman

The following interview is a transcript from SFNet YoPro Committee member Matt Gillman of SMB Compass interviewing Andrew Bertolina of Finvoice in late 2019.  We hope you enjoy getting to know the industry’s young professionals. 

Avi: Hey, we’re happy to have you with us today, even if you’re in a V neck t-shirt. We’re putting together these interviews for the SFNet young professional e-newsletter to give the group an opportunity to learn about interesting things that other young professionals in this space are doing. Whether it’s starting a new company, a new technology, new type of lending, or someone that’s just been very successful in their career. I was excited when your name came up as a potential participant because I have had the benefit of watching you over the last couple of years.

Let’s move along and give a quick introduction for readers. My name is Avi Levine and I’m from Star Funding.

Matt: And I’m Matt Gillman from SMB Compass.

Andrew: I’m Andrew Bertolina and the company is called Finvoice.  Nice to see you again Avi and Matt.

Matt: So, this interview will be somewhat formal, but I think our goal is a little different than others. We really want to get readers to want to read and viewers to want to view, so – Avi, do you want to kick it off?

Avi: Andrew, give us the quick 30 second pitch of Finvoice. So, you’re a tech-based company?

Andrew: Yeah. And the tech always works and there’s never any bugs – I’m joking.

Matt: Don’t worry, you don’t have to use this as a promotional interview.

Avi: Yeah, and 80% up-time for the service.  So, give us a 30-second elevator pitch of what Finvoice is?

Andrew: First and foremost, Finvoice is a software company.  We sell software to factors and asset-based lenders, allowing them to do three main things.

1. To originate in a few clicks with a fintech like experience. We’ve seen a 30% increase in front end sales conversion. Primarily at the smaller ticket lending deals.
2. We help with underwriting. In 2018 we caught three frauds and last year caught around 15. We think that’s a really exciting part of merging technology and private credit.
3. Third and finally we have a service module – we want to help lenders scale a book of business without just hiring bodies and account executives. For example, we can auto ingest invoices and schedules, so you don’t even need to upload a CSV. You can just chuck in individual assets. The broader idea is using technology to drive efficiency in commercial finance.

Avi: I think it’s interesting.  Most of the companies that we come across in our industry are run very traditionally. There’s a lot of paper, and it’s very cumbersome. The data comes from like eight or nine different places and a lot goes into putting it all together.

Andrew: Indeed, when we first came into the industry, we saw a lot of that, speaking to either BDOs or underwriters or account managers.  We asked what’s changed in commercial finance in the last 30 years and they were saying – not much. And some of the early push back we got as we tried to sell our software is that it’s difficult to change folks’ behavior. So those are early kind of challenges we’ve seen and tried to solve with our software.

Matt: And do you see that how that effects your actual client base?

Andrew: Our customers are primarily independent commercial finance companies. We have a few banks today and we’ve just signed a deal with the World Bank – so that’s pretty exciting, but most of our customers have been in business at least five or 10 years. A lot of them understand that they need to evolve and  use technology. They are afraid of what they call their ‘Uber moment’ and being in taxi industry.

Avi: That makes a lot of sense. You have a finance background, right? You started out of college in finance and you’ve moved over into this V-neck technology world.  Tell us about that transition.

Andrew:  I graduated with a degree in economics and worked as a buyside investor at a fund of funds.  We were primarily involved in the public markets but looked at a variety of asset classes. I did a Master of Finance at Cambridge and that’s where I first learned about asset-based lending.  I was really interested in the views of the borrower or client side, where you can extend credit to an otherwise uncredit worthy client, using collateral as your basis. On the lender side – I thought the investor returns were compelling on a risk adjusted basis.  So originally, we started Finvoice – we were a similar company to Bluevine and we tried to use technology to drive yield and efficiency within the space. We pivoted into being a software as a service company a few years ago – so that’s the longer term story but I remember in the early days of Finvoice, when we were trying to like give money or we were trying to lend money out to a Montana meat company. I don’t know, I’ve never been to a meat company honestly. I’ve never even been to Montana, you know?  I used to have a Bloomberg terminal, and I was running a portfolio. Now I’m cold calling business owners – but it’s been a good journey so I’ve enjoyed it.

Matt: I think that’s interesting. You’ve told us about your tennis career, but you did leave out your  Superhero ear piercing and your fine European coats. Want to tell us a little more about that?

Andrew: The Superhero ear piercing? I was living in Germany playing tennis. I don’t know. I came out with that ear piercing – like, who is this guy? Yeah! That wouldn’t fly nowadays.  Now we just go to V- necks and Patagonias.

Matt: You’re playing the part now.

Andrew: Got to look the part, right?

Matt: That’s right.

Matt: All you do now is work.

Andrew: Yeah, I’m way more exciting now. I’m like one of these guys who just works all the time and talks about

work when he’s not working, you know?

Avi: Is it more of the borrowers or the lenders looking for these efficiencies? Who is driving the demand for what you are doing? 

Andrew: I really think that depends on where you play in the credit spectrum. As you move down-market it tends to be more borrower driven. From half a million to a million – million and a half – you have a blend between borrowers and lenders driving efficiency, and then at the top end of the credit market the Wells Fargos, the Bank of Americas, that’s primarily lender driven and it’s a very different type of credit  profile.

Matt, I don’t know what you guys saw when you were at either OnDeck or InterNex.

Matt: Yeah, I think it’s very similar. When looking at small ticket it’s all about high volume, right? So, you’ve got to be able to move fast and react but also make sure you’re not making mistakes. So, I think technology is a huge part of that. Are you seeing more comfort in larger ticket lenders?

Andrew: The large banks have such big IT staffs or big tech stacks, so they have custom solutions. It’s a longer integration process, but they’re definitely looking to see what’s out there, and there is some appetite for change at those banks.

Matt: And are you able to bolt on to a lot of existing systems or are you going again to some of these bigger companies and having to overhaul what’s already there?

Andrew: We do both. So, we have a new product called FV pro and it’s an overlay – it strips out the underwriting and operational components and that’s an easy integration for lenders with a bunch of existing systems.

Matt: I think that’s also very interesting, so not only talking about underwriting and credit, but also user experience. So that’s the biggest piece right, – you said FV Pro is the overlay?

Andrew: Yeah FV Pro is the overlay, so the key idea there is whether it’s running a client or a new account debtor through 30+ third party API’s, intertwined with deposit accounts through Plaid or Yodlee or using more advanced data visualizations, we offer FV Pro as an overlay. Banks are built on very archaic systems and they need to innovate and improve their customer experience.

Avi: The lender should want those efficiencies, cost saving measures and better data. Before you said you caught a couple of frauds as well – tell us about those.

Andrew:  I mean lenders say they don’t want to go online. Bill Gates said – “who would want a smart phone”. 

In retrospect, there’s a lot of things that people say that aren’t necessarily observed in the trends. In terms of a fraud, we’re looking at the data aggregator Plaid or Yodlee. If you say hey, give me incidents where there is two consecutive days of transactions that have ACH transactions of the same amount, that might be evidence of an MCA lender.  So, you can use these data sources to mitigate fraud.

Matt:  I think it’s fascinating, if it’s all early warning and you have integrations that people wouldn’t have in a different situation, then I think that’s where you can really protect lenders.

Andrew: In private credit you have a weakness in data, in reporting, but if we’re looking at – from the ABLexample, we as a cloud-based provider, can look and tell you who is going into trouble from their days payable. Or from an agent - quicker than who would otherwise be able to if you’re using a more antiquated system.  So, imagine if you plug into all the S&P or all the public market data providers or all the ERP systems for large account debtors or small account debtors, RadioShack is headed for trouble or Barneys is not paying bills on time. So, you can anticipate problems a lot quicker using your top data sources. It’s a lot to build and a lot to maintain, but it can definitely be helpful to the lenders.

Avi: I think that is all very cool. Wasn’t your office inside a big townhouse at one time?

Andrew:  The new space is way bigger. We used to live in this house, and it was like the TV show, Silicon Valley.   

Matt: So aside from a fraternity party, tell us what’s next for Finvoice?

Andrew: So, in the first couple of years in the market we signed on a couple of dozen lenders and banks. 2020 is really about moving up market. We are launching our backend system which is called FV Operate, which is an entire factoring and ABL operating system. We are launching that first with our existing customers and then we’re moving up market to some of the larger tier I lenders and the big boys. So yeah – it’s good. And we’re hiring five people this week which is good for us.

Avi: How many employees do you have?

Andrew:We have around 10 engineers, so going to 15 now. Engineering heavy.

Avi: Outside of technology and shuffleboard, what’s your favorite hobby? Then we’re going to leave you with that?

Andrew: I’m a big surfer so –

Avi: I couldn’t tell.

Avi: If you show up at a meeting wearing a wetsuit, I’ll get Star Funding to use your software.

Andrew: I’ll wear a wetsuit to get you started to use the software. Matt, are you a surfer?

Matt: Yeah, I grew up surfing in New York, though, in Long Island.

Avi: All right well – thanks again for your time. We appreciate it. I think readers are going to enjoy it also, learning a little more about what goes into building a program like this and of course the man behind the changes in the industry.

Matt: We interviewed Rob Meyers as well – we’ll be competing to see who gets more traffic. Do you have any words for Rob?

Andrew:  I like Rob, Rob is great.

Matt: All right, talk soon.

Avi: We’ll see you later.

Andrew: All right thanks guys, good talking to you!

Bios:

Andrew is CEO of Finvoice and can be reached at andrew@getfinvoice.com or https://www.linkedin.com/in/andrewbertolina.

Avi is vice president at Star Funding. Coming from a product background, Avi looks at financing differently than his peers. With a marketing degree from Bryant University, and experience developing consumer products and consumer brands, Avi takes a real-world approach to purchase order financing. He can be reached at alevine@starfunding.net or https://www.linkedin.com/in/avilevine.

Matt is CEO of SMB Compass, a bespoke business financing company focused on providing financing and education to small businesses across the United States. Matt can be contacted at matthew@smbcompass.com or https://www.linkedin.com/in/gillmanmatthew/.