HSBC's partnering with fintech startup Tradeshift to offer trade financing and help businesses increase their working capital

Lynsey Barber
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HSBC invested in Tradeshift last year and is now integrating services (Source: Getty)

HSBC is working with a fintech startup to offer trade finance to more businesses to help increase their working capital, in a tie-up it has called "game-changing".

Tradeshift, a US-headquartered global startup which manages the supply chain invoicing process for businesses online without the hassle of paperwork and counts the NHS among its customers, will now offer HSBC financing.

It follows the bank's investment in the startup - which has been labelled the next PayPal and Skype for invoicing - last year.

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“We support customers right through the trade cycle and globally process $1m of trade a minute. The ability to provide value added services to the entire supply chain, combined with our capacity to provide finance across the breadth and depth of HSBC’s global network, create a unique proposition," said the bank's global head of propositions, global trade and receivables finance, Vivek Ramachandran.

“Early feedback from a range of clients has confirmed that businesses want to digitise and automate their operations and that they’re ready for simple, innovative solutions that improve visibility, enhance risk management and increase efficiency.

The financing option will launch in July for buyers in Europe and businesses supplying them globally, with further roll out planned.

Eight-year-old Tradeshift is also backed by Santander InnoVentures , the bank's venture arm, American Express Ventures, Paypal and several venture capital invesors in addition to HSBC, to the tune of $200m (£160m). It has 600 staff globally and 30 based in the UK.

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The platform creates a social network of sorts for buyers and suppliers and is paid for by companies looking to procure products or services, but free to those providing them creating a network effect. The software still saves on costs for the paying company, such as the NHS and Fortune 500 firms, by making digital the whole procurement and contracting process which has traditionally been inefficiently paper-based.

For HSBC, the ability to see the relationships between suppliers and buyers means they can more easily assess the credit risk of lending to a business. And the financing option has been built directly into Tradeshift's platform, offering what the two firms hope will be a one stop shop.

Ramachandran did not disclose a potential figure attached to the value of the additional business it will get through Tradeshift, but said the opportunity was big.

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