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How late payments became the driving force behind CreditHQ – and plans for global expansion

7 min read

21 October 2015

For most SMEs managing cash flow effectively is often the difference between life and death. It was with that thought in mind that CreditHQ was launched.

The CreditHQ package provides financial insights so that SME owners can check that they’re working with the right customers and suppliers – and to improve payment times. CreditHQ customers can search over 7m company records to check their credit status and payment performance. Information is also available when the financial situation of one of these companies changes.

Originally offered as a simple subscription product for small business customers of Barclays Bank, the team behind this service realised that it had greater potential. So in January 2014 they set up Ormsby Street, having bought the credit-checking tool from Barclays.

“I brought together a new team around the product within a new company focused solely on this area,” said Ormsby Street managing director Martin Campbell. “We’ve developed the next generation version of CreditHQ with a new business model which integrates multiple data sources and intelligently guides small business owners to improve cash flow. The scale of the opportunity is vast and we’ve been able to build on all the knowledge and data built up from delivering the previous product to Barclays SME customers to create something of enormous value.”

Research by the company revealed that the average overdue invoice is worth more than £6,000. “Late payment of invoices is a huge problem, one that keeps small business owners awake at night, both in the UK and also in many other countries around the world,” said Campbell.

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Moving from working for a series of large companies to a startup was something of a shock. “When I arrived on the scene on my first day, I was presented with an empty office. I had to scavenge a desk and chair from next door and a wifi password and get on with it,” he remembered. “As anyone who has run a small business will know, that feeling of coming into work with a long list of stuff and no-one to do it but you is pretty daunting, and I confess to thinking ‘What was I thinking?’ more than once. Thankfully, I was able to build the new team pretty quickly and we’ve never looked back.”

Funding so far has come from existing customers but now the company is bringing in “significant” revenue from both in the UK and abroad.

Following the launch, success has been rapid. In July 2014 CreditHQ was chosen, alongside Microsoft and Sage, by telecoms business EE to be part of its Business Apps cloud suite to help small firms boost productivity. And November 2014 saw the new version of CreditHQ launch in the UK, followed by Ormsby Street being chosen by UKTI to represent the UK at one of the prestigious SXSW festivals of technology in the US in March 2015.

Campbell described attending SXSW as “truly a breath of fresh air.” He said: “I learned lots from speaking to investors and other startups. My greatest learning though, was about scaling a business. Investors are only interested in businesses that can scale. This came in very useful when we were at FinovateFall in September. Finovate is perhaps the world’s best-known fintech event, and after my presentation showed exactly how the business can scale, at times we had investors queuing up to get more detail on us, which was gratifying to say the least.”

In September, Ormsby Street, which works with 25,000 UK small businesses, launched in Italy via a partnership with Deutschebank. “Italy has the highest proportion of micro and small businesses in Europe, so it’s a perfect first foreign market for us,” said Campbell.

He attributed Ormsby Street’s success to two main factors. First, a proper understanding of the opportunity in front of it. “Everyone in the company has a deep personal experience of working in a small business or working in financing small businesses – and so we understand the real world situation that small business leaders are in. This means that we’ve been able to get our product absolutely right,” he said.

“Second, we’ve set up our team with a very clear idea of what we need to do as a business. We know that with the right product, there’s great potential in this area, and that means that we have built the team from the ground up to move quickly and seize these opportunities. That’s why we’ve been able to form relationships very quickly with credit information agencies around the world and with bank partnerships and – crucially – how we’ve been able to deliver at scale even within a matter of months of this next generation product launching.”

With late invoice payment being an issue faced by small businesses worldwide, the company is continuing to look beyond the UK. A launch in Germany is planned and Campbell and the team are planning further European expansion.

“We’re talking with various investors about the best way to achieve the kind of presence that we’d like particularly in the US,” he said. “We’re also making waves that are getting us noticed by the larger companies in our field as well, so that’s leading to some very interesting conversations.”

Given that the problems of late payments are set to continue and even get worse, any service that can help SMEs with cash flow is sure to find a ready audience among customers and investors.