Tradeshift, a social network for invoices raises USD 75 million

The latest funding round values the company at around USD 600 million, according to a source close to the situation.

Businesses trade with each other and need to pay for those services. Traditionally invoices would be sent using expensive and inefficient methods. Tradeshift automates the process in a kind of social network that connects suppliers and companies, according to chief executive Christian Lanng.

The latest round was led by Data Collective and included HSBC, American Express Ventures, Notion Capital, CreditEase Fintech Investment Fund, and Pavilion Capital, a subsidiary of Temasek Holdings.

Being backed by large financial institutions gives Tradeshift access to a larger customer base as well as making its software the de facto invoicing software globally. Banks like HSBC are able to get access to data such as invoice payments by companies that could help them assess the risk profile of a potential borrower before lending them money.

More than that, Tradeshift now has a total user base of over 800,000 while it saw 250 percent growth in transacted value year-over-year in 2015. the company is approaching USD 5 billion worth of transactions this month alone.

The hotspot for the company has been in China and Japan where Tradeshift is growing fast. The co-founder said that it acquired 10 customers in the first quarter in China alone.

Tradeshifts software allows western businesses to connect and transact with suppliers in China, which as seen as one of the worlds biggest manufacturing hubs.

In addition, Tradeshift is playing in a highly competitive space. Rival Taulia, which offers a similar software to Tradeshift, raised USD 46 million earlier this year, while new companies like Fluent are experimenting with blockchain technology to solve the global supply chain issue. More than that, large firms are also competing with Tradeshift. In April, Western Union launched its own business-to-business platform to help companies connect with and pay each other. Chinese e-commerce giant Alibaba also does this.

With the availability of capital, many start-ups have opted to stay private for longer, but Lanng said that an initial public offering (IPO) is on the cards in the next couple of years.