How the Hot 10 lister helps small and medium-sized companies to fire on all funding cylinders.
Andrea Reynolds knows exactly how important the right source of funding, at the right time, on the right terms, is to any business. She founded Swoop Funding because she also knows how hard it is to secure.
Reynolds is a chartered accountant who started her career with professional services firm KPMG in Dublin, specialising in financial services and working with clients that included banks and insurance companies.
She moved to London with KPMG in 1999 and quickly gravitated towards smaller, younger businesses. Within a few years she was walking the talk, having left to set up her own firm providing corporate finance consultancy to start ups.
“I could see how challenging and time consuming it was for these companies to raise funds. I understood that it’s not just about getting the loan, or the finance, it’s about getting the right blend, the right mixture of, for example, loan and equity investment,” says Reynolds.
It’s exactly the kind of activity that in larger firms is looked after by a chief financial officer. “The problem is that, while every business needs a financial advisor, not every business can afford one. Yet, if you are in a small business, you are busy enough finding customers without having to do all this as well,” she says.
At best, the result is hours spent googling. Reynolds reckoned there had to be a better way: “I felt sure the technology had advanced enough to provide a solution.” And it had.
In 2018, together with co-founder Ciaran Burke, a fellow KPMG alumnus, she developed Swoop Funding, a platform that prompts a business towards the debt finance, equity investment or grant award it doesn’t just need but is most likely to get.
The genius is that it integrates all of a user’s data points, including bank accounts, accounting software and Companies Registration Office information, to come up with guidance.
The platform analyses the data to establish key metrics such as a business’s debt/service coverage ratio (DSCR), a measurement of the cash flow available to pay current debt obligations.
“It’s the number every lending institution looks at before deciding whether to give you a loan or not, and yet nobody is aware of it. The result is that, too often the business gets declined for a loan it should never have applied for in the first place,” says Reynolds.
She is the first to admit that Swoop Funding’s own start-up journey was fuelled by timely access to the right supports.
One of its first wins was securing Competitive Start Funding from Enterprise Ireland, Ireland’s trade and innovation agency.
Swoop went on to win an award from the open banking challenge, a competition funded by the main UK banks and managed by Nesta, an innovation fund. Earlier this year it secured £5 million from the RBS bailout fund.
All of its funding has helped fuel growth. Just over a year since its launch, Swoop Funding now has more than 1,000 providers on its website, including debt, equity and grant providers from across the UK and Ireland.
What makes the platform even more compelling is the fact that it provides a clear picture of a user’s spending behaviour and proactively identifies savings too, all the time improving its DSCR.
Swoop helps reduce its cost base by prompting significant savings across banking, insurance, foreign exchange, international payments and utilities. That frees up a business to do what it does best – making sales.
No business is too small. “We had one customer who had a turnover of £100,000. The owner paid his tech developers in Poland each month through his bank. Simply by switching to Transferwise Swoop helped him to save £7,000 a year,” says Reynolds, who could see the small and medium enterprise sector was ripe for such a product.
“Nobody thinks about the SME sector as a customer segment. It’s completely underserved and overcharged, despite the fact that every economy relies on them.”
Swoop Funding doesn’t add to their burden, it lightens it immeasurably. “Our product is free to use. We only get paid if we are successful, which is exactly as it should be.”
By October 2019, Swoop had generated €50 million in funding and savings for its users. Inclusion in The Fintech50s’s Hot Ten 2019 list, which marks it out as one of the world’s most innovative fintechs, rounds off a spectacular year.
Enterprise Ireland continues to play a key role in its development. “It has been incredible,” comments Reynolds, who says that having operations in both Ireland and the UK allows her to see the difference between supports on offer in Ireland and in the UK.
They are “poles apart”, she says. “Enterprise Ireland is recognised across Europe as the benchmark of best practice. Apart from the funding element, the really relevant support Enterprise Ireland provides is what makes the difference.”
“Swoop has a genuine competitive edge as a business but by being part of Enterprise Ireland, you get an additional advantage.”
Of course, it helps too that at every stage in Swoop Funding’s development, Reynolds has known where to turn, and when, for the right mix of investment, debt finance and grant funding.
“We’re like a case study for our own platform. We have used every form of funding available to a business of our size and stage. That’s what’s nice about Swoop – we’ve done it ourselves.”