Interview of VELOTRADE, the 2.0 trade finance platform

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Interview of VELOTRADE, the 2.0 trade finance platform

Interview of VELOTRADE, the 2.0 trade finance platform

Dear Vittorio,
You are one of the founder of Velotrade. Can you briefly explain us first what is your background ?

Dear Nicolas, thank you so much for featuring our company in your EXPERT’S EYE series.
I spent most of my professional career as an Equity Derivatives Trader in London and then as an Equity Derivatives Broker here in Hong Kong. In January 2017 I gave up my “grown up’s job” to pursue Velotrade full-time.

What are the main activities of Velotrade, and what led you to think about creating this group

Addressing a double pain point for exporters and investors. Velotrade is a tech-enabled trade finance platform focused on serving the investment needs of sophisticated and demanding institutional investors and the financing needs of Asian SME exporters. It addresses a double market gap
1) Supporting exporters in Asia with more flexible and affordable financing and
2) Allowing investors access to a new asset class that has historically only been accessible to banks and other financial institutions.
Finding Yield in Today’s Climate. Velotrade’s platform is the only place where investors can realistically find a replacement of a money market instrument that offers higher yields when compared to similar asset classes today. The assets are short dated (30-90 days), yield 6-9% p.a, and Investors pay no fees. The assets come with risk mitigants such as Insurance (Seller side), Recourse (against supplier under all non-repayment situations), or Personal/Corporate Guarantees. As of today, Velotrade has ZERO Defaults. NONE.
As per the second part of your question, I spent most of my career in a world aflush with liquidity. I spent far too much time hiding behind computer screens looking at very small numbers and fighting over a few basis points here and there. The sudden realisation that most of the productive world and SMEs in particular had almost to access to liquidity triggered the idea of connecting two worlds, the one of institutional investors holding excess liquidity and the one of SMEs starved for cash. Since 2008 there has been a huge inflow of liquidity as Central Banks have been printing money (and now even more!) but as the liquidity entered into the system, regulatory and capital requirements of banks increased at a similar pace. The result was that most of the liquidity ended up causing asset inflation (stock markets and alternative assets at all-time highs), and very little of it entered the productive sector. Velotrade’s ambition is to be the bridge connecting excess liquidity with sectors of the economy that need such liquidity.

Many of Alpha Prime clients are operating in the goods ‘trading sector, including through E-commerce plateforms. How can Velotrade typically help such clients ?

Velotrade flagship product is invoice discounting. If an exporter has a verifiable transactional history with large buyers, Velotrade can help by advancing around 80% of the invoice. The disbursement of funds is extremely fast and the process is aimed to be very user friendly.
We have added eCommerce financing to our product range and we are able to assist eCommerce suppliers with advance facilities. Again, the process is fast and painless.

What are the main requirements for a client considering to use your services, and for what reasons he should consider Velotrade rather than a traditional bank, or basic factoring company ?

For Invoice discounting, the main requirement is a provable history of successful past transactions with reputable credit-worthy debtors.
For eCommerce financing, we require data on past platform activity.
We are much faster and flexible than traditional financial companies. Once onboarded we can disburse funding in a matter or hours (or less!). We do not require our suppliers to commit all invoices but they can use Velotrade only when required. A great value proposition is that the liquidity provided is originated by a wide range of investors with different risk appetites. Since inception all transactions accepted by us were financed by our investors.

Velotrade business seems to grow quite well since its inception: what are the next steps for the group in terms of services offering, and expansion ?

We are growing extremely fast: the current environment is extremely conducive for our product offering: rates are at 0% so that trade finance has become an extremely attractive asset class for investors, there is strong demand and suppliers are in need for funding and banks are not helping.
We are continuously broadening our offerings and we are able to finance most transactions backed by trade. Wherever there is a delayed payment, as long as there are risk mitigants in place, we can step in to help.
We have access to an extremely large amount of liquidity and we are always looking for opportunities to deploy!

Executive Chairman, Velotrade Management Limited

Vittorio De Angelis
tel: +852 3500 8298 | mob: +852 6470 2519 | 
Room 24, Units 405‑414, Level 4, Core E, Cyberport 3
100 Cyberport Road, Hong Kong

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