London: KPMG in the UK today announced a strategic alliance with C2FO, the online marketplace for working capital. It will introduce C2FO, a new supply chain finance platform, to UK business; C2FO is already a huge success with more than 1 million current global market members.
Founded in 2008 in Kansas City, a well kept secret as a Midwest tech start up hub in the US, C2FO currently delivers more than $1bn in early payment for suppliers each quarter. C2FO is being used by a number of Fortune 1000 companies including industry leaders in retail, transportation, medical, logistics, and manufacturing. In the UK, where many SMEs continue to struggle to access finance in the wake of the credit crunch, the new platform has the power to be a 'game changer' for the industry.
"KPMG and C2FO have formed the alliance to respond to a number of challenges faced by many businesses in the UK today", says Simon Collins, KPMG Chairman in the UK.
"The traditional bank lending model has changed, perhaps forever, as a result of the 2008 crash. We know from some of our smaller and medium-sized clients that they continue to struggle to borrow from the banking high-street. However, myriad alternative sources of finance, such as asset-based lenders and crowd-sourcing platforms, are filling the gap. C2FO will provide a much-needed non-bank source of working capital finance to suppliers and will help many small firms stabilise their supply chains. I believe this will prove a really interesting addition to the increasingly diverse mix of funding available to businesses, particularly SMEs.
"The alliance is also representative of our commitment to developing services which meet the needs of the SME sector — the backbone of the UK economy and its future growth — as well as harnessing the power of transformational technology."
C2FO is the latest addition to KPMG's expanding Digital Innovation Network and follows the announcement of the partnership KPMG agreed with Xerolast week to provide select online accounting and tax services, such as accounts, bookkeeping, payroll, VAT and corporate tax to small and medium sized enterprises using the cloud.
The UK government, which is encouraging UK corporates to play their part in supporting economic growth, is backing the new partnership.
Skills and Enterprise Minister Matthew Hancock said, "I am very excited by this strategic partnership between KPMG and C2FO.
"Working capital is the lifeblood of all business and supply chain finance is an excellent way of ensuring the UK's smallest businesses have access to the finance they need. Combining KPMG's experience with C2FO's market-leading technology will improve access to working capital for suppliers of all sizes and allow large companies to put their cash piles to work in the economy.
"The collaborative approach at the heart of C2FO's market-based approach will improve the relationship between buyers and sellers, making the supply chain more efficient and both suppliers and buyers more internationally competitive. This is a clear demonstration of the power of digital technology to disrupt and improve the way UK companies operate and I look forward to following the success of this partnership in the coming months."
Alwin Magimay, KPMG's Head of Data & Analytics, "The UK economy is undergoing fundamental changes with a record number of small businesses being created every year. Today, companies can attain FTSE 100 status in less than 5 years. Small businesses are the lifeblood of the UK economy and need a digital platform to help them get access to capital on their terms. I am pleased that KPMG, working with C2FO, is bringing this new and innovative digital capability to the UK. I believe it will transform and optimise the way working capital is deployed and make this process more efficient, thereby creating a win-win situation for small and big business alike.
Dru Shiner, C2FO's Chief Sales Officer, "C2FO is excited to partner with KPMG as we expand the presence of our dynamic early payment marketplace in the United Kingdom. Companies of all sizes around the world have realised the unique advantages of receiving early payment through C2FO including low cost funding without credit underwriting or paperwork. We are looking forward to improving the working capital health of companies throughout the UK."
Both parties have signed a three year agreement to work together in the UK. No consideration has been paid and the deal does not include any equity stake.