Topi, a Berlin-based startup that raised a $4.5 million pre-seed funding round, is here. The company is working on a payment solution that is both fast and capital efficient.
Consumer payments have evolved at a rapid pace over the last few years. Customers expect to be able to choose between several payment methods that all offer different advantages and drawbacks.
You can usually pay with a credit or debit card, which will allow you to accumulate points or cash back, and take advantage of some kind of insurance. You can pay with a digital wallet. You can spread a big purchase over a number of months with Affirm, Afterpay, and others.
B2B transactions have not changed much. Businesses face a dilemma, they either pay directly or spend time negotiating a financing offer. Financing options can be offered directly by a supplier. Sometimes companies ask their bank directly. It is a lengthy, bureaucratic and manual process.
Topi wants to reach the ideal diagram of B2B payments, a payment solution that doesn't require any paperwork, but a payment method with some financing offers. Topi believes it can offer financing options of up to five years.
We are building all of that ourselves. The first product will be on the market next year, according to co-founder Estelle.
This payment solution would be useful for expensive purchases, such as a new machine, a big event or an upgrade for the restaurant kitchen. Topi will integrate its payment solution directly into the checkout flow of popular B2B merchants.
Many merchants already offer financing options, but they usually just link to a help page with more information. The manual process will be brought straight to the point of sale.
There is some financial risk involved with the financing of the business. The company wants to be able to make smart decisions. A customer should be able to find out if they are eligible for financing in a few minutes.
Charlotte told me that they have an in-house risk team. We don't want to ask businesses to submit financial statements from three years ago. Everything has to be digital.
She gave me some information about data sources. Topi could get some sales data from a payment processor. With open banking rolling out across Europe, you could also imagine entering your business bank account login information to let Topi fetch the past few months of transactions.
Several business angels invested in the startup, such as HelloFresh founder Dominik Richter, N26 founder Max Tayenthal, Adyen founding team member Thijn Lamers and WeFox founder Fabian Wesemann.
The two co-founders of Topi met during their time at Harvard. While working for Apple, Pallua and Merle worked for Goldman and Via Transportation, respectively. Topi's CTO was the leader of the engineering team at GoCardless.
Topi has a vision that goes beyond simple payments. Companies who use Topi could end up spending a lot of time on Topi's portal if the startup becomes an important brick in B2B transactions. Upcoming payments and early repayments could be seen by them.
Topi's portal could become a product of its own. Customers could choose insurance products directly from Topi. There are a lot of possibilities once you control the customer relationship. Topi is aware of that opportunity.
