Analysis Featured

Singapore’s innovative fintech sector

Singapore has always been the first choice for Asian HQs of MNC financial service companies. The island nation has a supportive regulatory framework and laws which help in creating a very accommodating environment for new fintech start-ups. The fintech regulator-Monetary Authority of Singapore also encourages innovation along with keeping the market protected. Singapore is the place one wants to be if they are planning to start their own venture, great vibrant start-up ecosystem. Amex, JP Morgan Chase, HSBC, and many other operate in Singapore. A variety of fintech start-ups across different sectors is setting up Singaporean Fintech Ecosystem. One such company thriving in the Singapore Fintech scene is InvoiceInterchange.

Company origin

InvoiceInterchange was established in 2014 by Brian Teng. He is also the current CEO. It is not your typical P2P Company; it lends the money by auctioning company’s invoices.

InvoiceInterchange vs factoring

One thinks of factoring when it comes to invoices and getting money for it, but InvoiceInterchange is much different from factoring. In factoring, the company has to sell all its invoices through that particular company but with InvoiceInterchange one can even sell one invoice, it does not have to be all of the invoices at once; it all depends on the individual’s need. Another factor that sets InvoiceInterchange apart from the other factoring companies is it offers transparency. More often than not, business owners complain about all sorts of hidden fees charged by factoring companies. Along with highlighted rate, they charge all sorts of miscellaneous charges which are never clarified by the companies. But in the case of InvoiceInterchange, all the costs will be mentioned upfront and no other hidden fees will be charged.

Before the seller is allowed to use the Invox platform, all the companies go through credit check and assessment. Once they pass the due diligence and possess the minimum criteria required to be listed, they are allowed to use Invox platform and post their invoices for auction. In their endeavor to maintain the highest level of security for the buyers, all the invoices go through initial screening and verification as well and only then they are allowed to go live on the portal. It has developed a very efficient system by utilizing the country’s most reliable source of financial and legal information (GVIN by Bisnode); the same information is used by the banks and financial institutes of the country.

Auction system

Choosing an auction route was quite different and unusual especially for a fintech company, but the reason behind the auctioning system was giving both the parties that are SME who is selling its invoices and investor who is buying the invoices a fair chance to determine the price and both parties get the best price. And to safeguard the interest of the SME, the invoice seller, they are allowed to set a reverse cap or ceiling price which basically means they will not pay more than the set ceiling price and the same way investors cannot charge a discount fee higher than the ceiling price. And so far auctions have been nothing but 100 percent successful.


So far it has managed to auction off invoice worth 6 million SGD, the average size of the invoice is about 45,000 SGD, and average duration is about 42 days between the period it is put on the portal and paid. Due to their unique business model and stringent safety measures, the company has not yet encountered any defaults. Investors come from various different backgrounds but are mainly accredited investors, high net worth individuals, family offices, financial institutions and some retail investors as well. In order for an investor to invest it has to open an account with minimum $30,000 SGD. Opening and deactivating an account is very simple and non- tedious work. Usually, after the application is submitted, it takes two business days to review the documents and if someone wants to deactivate all they need to do is send an email and just in case they want to reactivate it, later on, there are no extra fees for that as well.

Legal framework

Since invoice P2P space is relatively new space hence it is not yet regulated by Monetary Authority of Singapore (MAS), therefore no license is required to operate for now. Requirements for equity crowdfunding and P2P loan space is used as a benchmark by InvoiceInterchange and to keep themselves on a solid footing as and when the regulations rollout, they have adopted few of HTE requirements as well like having separate bank accounts, for the purpose of having good record keeping. Investors have to deposit the money in advance with the Invox and it remains with them until they buy the invoices.

On an average the investor is able to make double digits return on their investment usually in the region of 10% or more, considering the locking period is only 42 days on an average it is considered to be a pretty good return. Just like other P2P companies it also has a similar type of revenue generating model. They charge on average 1.5% of the total invoice value from the SME and it usually ranges from 0.5% to 2% and charges 20 % as a commission from investors on their returns.

Future plans

Just like every other aspiring and ambitious company, InvoiceInterchange also has big growth plans. In next three years, they want to have their presence in few countries in South East Asia countries and in five years times they want to have a regional platform that facilitates short-term finance in a simple and flexible manner. Also, want to have an online platform that can rival the best in the industry. Fintech industry in Singapore is pretty attractive in itself, bank lending in about $350 billion SGD per year but they have big plans for InvoiceInterchange hence they want to expand beyond Singapore. Even though the size of Singapore market is pretty significant still the penetration level is one of the lowest in the world. Only 5 % of the market is tapped so far as compared to the UK which has penetration level well over 10%. And this is not only prevalent in Singapore but all across South East Asian and Asian countries because traditional factoring in these parts of the world is considered as a blemish. People need to understand the benefits of factoring and how it is a better and cheaper alternative to banks.

In Asia, most of the business owners have this perception that if someone is using factoring services, their business is not in a good state and they are struggling for cash flow. Since it can affect their adversely they refrain from using the factoring service. But it is about educating them the benefits of factoring. They have to understand factoring or invoice financing is a good financing instrument, trade receivables can be used to raise quick funds that too at a very good rate as compared to bank loans which are time consuming and expensive as well. That’s what InvoiceInterchange is planning to do; they want to add more SMEs to their platform by telling them what they do. InvoiceInterchange is suffering from usual start-up constraints-funds because it is self-funded and bootstrapped it is finding it hard to reach out to more SMEs.

Well it is very clear in last few years, Asia has been the most booming market, and there is a huge untapped market for the businesses especially when it comes to financial market. People in Asia have a conservative mindset when it comes to taking financial decisions, so through proper marketing and by building confidence among the business owners InvoiceInterchange will be able to make quick inroads. They have a unique business idea and great service to back that up, so in coming years InvoiceInterchange will be able to establish themselves as a leading player in invoice P2P space.

Author: Heena Dhir and George Popescu

George Popescu
George Popescu

About the author

George Popescu

Serial entrepreneur.

George sold and exited his most successful company, Boston Technologies (BT) group, in 2014. BT was a technology, market maker, high-frequency trading and inter-broker broker-dealer in the FX Spot, precious metals and CFDs space company. George was the Founder and CEO and he boot-strapped from $0 to a $20+ million in revenue without any equity investment. BT has been #1 fastest growing company in Boston in 2011 according to the Boston Business Journal and the only company being in top 10 fastest in 2012-13 as it was #5 in 2012. BT has been on the Inc. 500/5000 list of fastest growing companies in the US for 4 years in a row ( #143, #373, #897 and #1270). After the company sale in July 2014 until February 2015 George was Head-of-Strategy for Currency Mountain ( ), a USD 100 million+ holding company focused on retail and medium institutional currencies, precious metals, stocks, fixed income and commodities businesses.

• Over the last 10 years, George founded 10 companies in online lending, craft beer brewery, exotic sports car rental space, hedge funds, peer-reviewed scientific journal ( Journal of Cellular and Molecular medicine…) and more. George advised 30+ early stage start-ups in different fields. George was also a mentor at MIT’s Venture Mentoring Services and Techstar Fintech in NY.

• Previously George obtained 3 Master's Degrees: a Master's of Science from MIT working on 3D printing, a Master’s in Electrical Engineering and Computer Science from Supelec, France and a Master's in Nanosciences from Paris XI University. Previously he worked as a visiting scientist at MIT in Bio-engineering for 2 years. George had 3 undergrad majors: Maths, Physics and Chemistry. His scientific career led to about 10 publications and patents.

• On the business side, Boston Business Journal has named me in the top 40 under 40 in 2012 in recognition of his business achievements.

• George is originally from Romania and grew up in Paris, France.

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