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We’re approaching a very exciting time at vabble: all the team’s hard work over the past year is starting to come together and we’ll be processing transactions this month.

With that in mind, we wanted to share anupdate of what we’ve been working on for the last few months, plus what’s next on the horizon.

We hope that you’ll be as excited as we are when you’ve finished reading this update!

![IMG_1076.jpeg](https://storage.googleapis.com/vabble-prod/IMG_1076_891292be18/IMG_1076_891292be18.jpeg)

_To learn more about investing in vabble, email investors@vabble.io_

 ## What’s been happening at vabble over the past 3 months

Here’s a summary of some of the important changes and updates from the past few months:

### Team: Simon Knowles joined vabble as partner and head of technology  

The main update regarding the vabble team has been Simon Knowles, former MD Head of EMEA Development at Goldman Sachs Asset Management, **joining as partner and head of technology at vabble.**

Simon's involvement goes beyond being an investor. He brings invaluable technical expertise and enhances our credibility with tech investors – and he has already attracted a new type of investor interest, that of tech investors.

Simon joined vabble for three key reasons:

1. **Timing:** As Simon says himself: “[We’re] at the crossroads of a lot of different macro themes that are happening in the market.” There’s an increased demand from institutional investors for private credit assets and investments with an environmental, social and governance overlay. There’s also a greater demand for trade financing for small and medium business, plus those in emerging markets, and a general increase in global trade off the back of the pandemic. 
2. **Technology:** The great thing about vabble’s technology is that it’s not trying to solve new problems. “For me as a technologist, that's perfect, because Pablo already knows exactly what capabilities he wants to build,” Simon said. “You're not going to stray too far from that to be able to build [the platform] and scale up. You've got the starting point – it's not just some wild idea that needs to be formulated.” vabble has a highly motivated and collaborative tech team with a well designed data model and modern tech stack, and a strong focus on creating a neobank-like experience.
3. **Company:** Simon also called out the reputation, connections and years of experience of the senior leadership team, particularly Pablo, Derek Hudson (co-founder, director and Chief Commercial Officer), and Francesco Baldanza (director and strategic investor). “They know the legal process, they know the framework and they know how to get these right,” Simon said. “I put a lot of faith in the founding fathers of vabble.”

To find out in more depth why Simon joined vabble, read our article: [vabble FinTech attracts Goldman Sachs Tech MD veteran. “It’s just the right time for this”.](https://www.vabble.io/resources/simon-knowles)

Besides our new joiner, the team is solid and we’re very pleased to say there’s been no churn. We’ve already written an article about our team and culture, and you can read that here: [vabble's unique culture DNA: transparency and talent.](https://www.vabble.io/resources/our-culture)

“A good culture is being able to give direction to that competitive drive some people have, and direct it towards the good of the whole,” Pablo said. “We want to allow space for that competitiveness to be expressed in the context of the team, and not bash anyone in the process.”

A part of the team is based in Argentina, local to the Latam market, in the same time zone as the clients we’re working with. They link in with on-the-ground bankers in Peru and Ecuador who have relationships with exporters. Others are based in London, New York, and elsewhere in Europe.

“We want to make an impact,” Pablo said. “We think that the work we’re doing in emerging markets is great because it's going to allow us to build a valuable company. And the value of the company can be measured in wealth, but more than wealth – it can also be measured in the wellbeing of the people that are impacted or associated or touched by the venture.”

### Product: launching at the end of August

Our product has undergone further changes and improvements and we are ready to start processing transactions at the end of this month of August. 

In the past year or so the team has been mainly working on development and legal infrastructure, to support the commercial team who have been in close contact with the local markets, to address the sizable latent demand for vabble’s offering. We’ve greatly enhanced our platform's cybersecurity, reaching state-of-the-art levels with robust defences, and we’ve made substantial refinements and upgrades to the UX and UI, which will support the activation of the commercial side.

We continued working closely with Goldman Sachs Asset Management, taking their input on the design of the end to end process, whom we expect will be ready to start operations soon. 

Here are three of the main product developments from the past quarter: 

### 1. JPMorgan API integration: automatic reconciliation and automatic payments at the click of a button

This month – August 2023 – marks a business milestone for vabble as **we start processing transactions**. We’ll start small, testing our end to end operations with a small invoices to make sure the whole process works as it should. Thorough testing is vital to ensure we are fault free with live transactions. 

One of the main concerns for investors was how we would deal with reconciliation. This is because with our business model there are at least five transactions per invoice: 

1. The investor gives the money to vabble to fund an invoice
2. vabble pays a large portion of the invoice, minus interest costs, to the exporter
3. Later, the importer pays the invoice amount to vabble
4. vabble pays back the investor 
5. vabble pays the invoice balance to the exporter

The tech team at vabble has been working with other tech teams at world leading financial and marketplace companies to understand how best to manage all these transactions. That’s where we’ve received the support of partners such as JPMorgan. With a solution enabled by their API integration, the team at vabble can handle reconciliation, payments, and collections in a largely automatic way.
Buyers (and investors) get a real time view of every transaction via a payment reference. This allows for automatic reconciliation and payments without users having to leave the vabble platform.
All of this is done through the API, requiring no manual file uploads – just the click of a button, given certain conditions are met. 

![vabble cloud.png](https://storage.googleapis.com/vabble-prod/vabble_cloud_0870d0ef6e/vabble_cloud_0870d0ef6e.png)

### 2. Bulk upload invoices: save time by uploading up to 100 invoices in one go

Another new feature allows exporters to upload invoices in bulk using a CSV or Excel file. 
Previously exporters could only upload invoices one at a time, using a wizard and following a number of steps:

1. Give some information about the invoice, such as the invoice number, amount, shipment date, due date, etc 
2. Upload the document
3. Sign the buyer notification and payment instructions

Then you would repeat the process for as many invoices as you wanted to upload.

After some customer research, usage patterns, and speaking to test customers, we realised this was a pain point due to how time consuming it made the process. 

In the new release, it’s now possible to upload up to 100 invoices all at once using a CSV or Excel file containing all the relevant information about the invoice. 

You can then easily adjust this in the vabble platform – if the columns in your file don’t quite match up to the platform, for example – and you can add any missing information too. 

Watch our video on how exporters can do this via vabble: [vabble Bulk Upload](link)

![vabble csv upload.png](https://storage.googleapis.com/vabble-prod/vabble_csv_upload_20323cfa6f/vabble_csv_upload_20323cfa6f.png)

### 3. New onboarding process: easily join the vabble platform and get started in a few minutes

Another big user experience improvement to our platform is a new onboarding process and interactive wizard. Previously, onboarding had more steps and required inputting a lot of information manually. 

The new process is much improved making it quicker and easier to get up and running on the vabble platform. 

![vabble sign up 1.png](https://storage.googleapis.com/vabble-prod/vabble_sign_up_1_530f6c78c5/vabble_sign_up_1_530f6c78c5.png)

The improvements include: 

- **Country specific customisations in the onboarding process.** For example, an exporter from Peru entering their tax ID (called the RUC or Registro Único del Contribuyente), is now automatically checked for matching a genuine RUC in the government database.

![sign up 2.png](https://storage.googleapis.com/vabble-prod/sign_up_2_df97fe69ca/sign_up_2_df97fe69ca.png)

- **KYC and KYB are included**, which helps increase the security of the platform. Onboarding with KYB is usually a laborious process, similar to what opening a bank account online can be. As there’s a lot of documentation to upload, vabble’s customer support group usually had to be the one to assist clients throughout the process. However, our new onboarding process is a lot more intuitive and purpose led, which should mean fewer people will drop out at the sign up stage. 

It’s a lot more user friendly, and a big improvement on how Latam banks onboard businesses. In principle, there are no hard copies of documents to deal with – everything is digital, and we use various leading AI and tool such as Docusign to handle the review of documents, and signing of the master framework agreement.  

![sign up 3.png](https://storage.googleapis.com/vabble-prod/sign_up_3_10cc5a40c7/sign_up_3_10cc5a40c7.png)

- **We have also set up 2-factor authentication.**

![sign up 5.png](https://storage.googleapis.com/vabble-prod/sign_up_5_cd3fe87bde/sign_up_5_cd3fe87bde.png)

Following, the interactive wizard takes exporters through each part of the platform, with an assisted tooltip explaining how to use it. This makes it easier to understand the platform from the beginning, and ensures the user journey is simpler and more straightforward

### Funding: finalising the current round

When it comes to funding, we are making good progress towards getting closer to the finalisation of the current round. 

We have secured a bit more than half of the round with indications of interest. We are currently having conversations with a handful of potential investors to lead and price the round. At the same time, we have been raising funds as advance subscription, convertible to equity in a priced round, i.e., via SeedFast, from partners and investors. 

The funds raised in our round will go towards growing the business, marketing, and continuing to develop strengthening cybersecurity measures, and enhancing our AI/automation infrastructure.

### Recognition: some examples of the interest and support shown to vabble by others

![IMG_Speak.jpeg](https://storage.googleapis.com/vabble-prod/IMG_Speak_0826af837d/IMG_Speak_0826af837d.jpeg)

We’re so happy to see the different ways vabble is being recognised by others in trade finance, fintech and business in general, so we wanted to share some recent examples. 

Simon Taylor, the man behind Fintech Brainfood, kindly included vabble as a key trade finance fintech to watch in a recent edition of his newsletter: [Fintech Brain Food: The future of money](https://sytaylor.substack.com/p/fintech-food-the-future-of-money). Simon’s newsletter is one of the most widely read newsletters on the fintech industry, with 32,000+ subscribers including VCs, investors and fintech operators.

We wrote a response to another of his newsletters, in which he talked about how fixing trade finance could have a big impact on the world. Read more in this article: [Why trade finance is the next big opportunity in fintech.](https://www.vabble.io/resources/trade-finance-fintech-opportunity)

We’re also excited by initiatives and opportunities such as:

1. [Creative Destruction Lab (CDL)](https://creativedestructionlab.com/): We’re working with the mentors and investors at CDL, which is a global startup program for seed-stage, science-based companies. The program employs an objectives-based mentoring process by a selected group of accomplished entrepreneurs, angel investors, economists, and scientists. 
2. [Boardwave](https://boardwave.org/): Pablo, vabble’s founder, has been offered to be part of the Boardwave network. Boardwave is a network of founders, CEOs, Chairs, independent NEDs and their investors from across Europe, providing easy access to relevant skills, knowledge, experience, mentorship, guidance and advice. 
3. [Be the Business:](https://www.bethebusiness.com/) We were also invited to apply to Be the Business. Be the Business is an independent, not-for-profit organisation that aims to help UK business owners and leaders improve the performance of their business. It’s funded and supported by the UK government and some of Britain’s leading companies, including GSK, Siemens, Amazon, BAE Systems, McKinsey & Co and Accenture.
4. [Trade Finance Initiative](https://www.tradefinancedistribution.com/): Pablo has been invited to a panel of speakers at an important event gathering institutional investors in trade finance in October. 
5. [Fintech and AI](https://www.linkedin.com/posts/pablote_just-got-back-from-an-incredible-time-activity-7098082718629912576-a0CF?utm_source=share&utm_medium=member_desktop):  We were invited to present at a Google Cloud Fintech Community event, where the focus was on the transformational impact of AI and ML in fintech. Hosted by Entrepreneurs Collective and Google, the event highlighted how these technologies are reshaping emerging fintech markets. This event further solidified our belief in the significant potential of vabble.io to create a positive impact in the dynamic markets it touches, both on the institutional investor, as the emerging markets use sides.

## Looking to the start of trading and beyond

We’ve explained in this article what an exciting time this is for everyone at vabble, with:

- An important new addition to the team
- Various product developments
- Another round of funding in progress
- Some great examples of recognition and interest in the company

Being ready to run those first test transactions and then move into the start of trading is what everyone on the team has been working towards, and we’re thrilled that we’re almost there. 

We’re also truly excited about the opportunities that lie ahead. What we’re doing hasn’t been done before – we’re breaking new ground and we’re committed to delivering exceptional value to our clients and stakeholders. 

_To learn more about investing in vabble, email investors@vabble.io_

thumbnail_IMG_1079.jpeg

IMG_1079.jpeg

vabble’s Status: Updates from the Last Quarter and Beyond

“Fixing trade finance is the most significant impact we can have in the real world.” 

The quote comes from one of Simon Taylor’s [most recent newsletters](https://sytaylor.substack.com/p/fintech-food-trade-finance-is-the), Fintech Brainfood. His newsletter is one of the most widely read newsletters on the fintech industry, with 32,000+ subscribers ranging from VCs, investors and fintech operators. 

At vabble, we couldn’t agree more with Simon’s statement and it **underpins the entire ethos behind why we set up vabble.** 

We thought it would be worth writing an article that further explores why the trade finance industry is especially relevant now and how we’re contributing to solving trade finance at vabble. 

Simon kindly included vabble as a key trade finance fintech to watch in another recent edition of his newsletter: [Fintech Brain Food: The future of money.](https://sytaylor.substack.com/p/fintech-food-the-future-of-money)

_To learn more about investing in vabble, email investors@vabble.io_

## Why is trade finance important now?

The trade finance gap is already [worth more than $1.7 trillion a year](https://www.adb.org/news/global-trade-finance-gap-widened-17-trillion-2020). But it’s very concentrated on financing companies based in developed countries. 

In developing countries, the opportunities are huge. In fact, [80 - 90% of global trade needs financing](https://www.wto.org/english/res_e/booksp_e/tradefinnace19_e.pdf). 

But what needs to happen for trade finance to truly be the opportunity we know it can be? And what exactly is happening that makes trade finance so important right now? 

### The issues with trade finance

In his newsletter, Simon Taylor outlines a number of issues with trade finance that must be solved for it to truly become the opportunity it can be:

- **Trade finance has no central governing body and digital trade standards aren’t widely adopted:** With no single central governing body, it’s tricky to ensure every country is trading in the same way. For example, the World Trade Organization doesn’t have authority over international trade, and therefore faces the challenge of getting countries to accept digital trade documents. The UN has the [Model Law on Electronic Transferable Records (MLETR)](https://uncitral.un.org/en/texts/ecommerce/modellaw/electronic_transferable_records), but so far only seven states have passed legislation to comply. As Simon writes: “Less than 1% of global trade is digital, and at least 100 standards have been created.”
- **Hundreds of laws could apply to a single trade:** Due to the global nature of trade finance, trading involves multiple jurisdictions each with its own laws and regulations. This means a huge number of laws could apply to each trade, leading companies to spend valuable time sifting through different laws in order to remain compliant.
- **Compliance, fraud and AML risk is hard to manage:** Simon explains it perfectly in his newsletter: “Verifying anything in global supply chains is like a relay race. You're relying on the last person in the chain to have done their job. But you have no idea how the person before you performed or what happens after you hand off the baton.”
- **Trade finance and geopolitics are inextricably linked**:Global sanctions, tariffs and bans all affect trade. And if a government makes a change that will affect global trade, it sets off a chain of reactions from buyers, suppliers, banks, and shipping companies alike.

There’s a lot of issues in trade finance and not many solutions. Fintech can’t solve all of them, but there are some that fintech can attempt to fix.

### The timing is right for fintech to solve trade finance issues

We recently spoke to partner and newest member of the leadership team, Simon Knowles, about [why he chose to join vabble](https://www.vabble.io/resources/simon-knowles). One of the main reasons he’s getting into trade finance now is **timing: now is a much better time than 10 years ago.**

Why is trade finance an opportunity now, when it hasn’t been in the past?

- **The push to digitise and automate trade finance: **When so much of trade finance is paper based, it’s very time consuming to try and apply filtering and screening to the invoices purchased. That’s why there’s been a call to digitise the information captured to allow more automation. 
- **Asset managers can get transparency today**: Asset managers are used to having more information now thanks to the internet, which means they now want to know exactly what they’re investing in. This helps prevent money laundering and product mis-selling, but deeper knowledge also allows asset managers to negotiate better deals. 
- **Fintech companies are already making a difference: **As Simon Taylor highlights in his newsletter, fintech companies are already starting to make some headway into making trade finance more accessible. He pointed out how [Tradeteq](https://www.tradeteq.com/) (which is also one of vabble’s tech partners) is a fintech company that has already helped process $46 billion in instruments. The same applies to companies like Wise and Airwallex, that are providing borderless accounts and simplifying the management of multiple currencies. It acts as a preview of what lies ahead for cross-border trade.
- **The rise of large language models:** Being able to use LLMs to summarise the content of documents could be a game changer for the trade finance industry.

## Why is this a big opportunity for fintech?

As Simon Taylor said in his newsletter: “Fixing trade finance could be the most impactful thing we can do to prevent modern slavery, create energy security and increase global GDP.” 

From a financing perspective, trade financing is a little different to traditional credit. With a traditional loan, the agreement is usually between the lender and the borrower. But trade financing **involves three parties:** the exporter (seller), the importer (buyer) and the financier. Not only that, but it’s also backed by an actual transaction (the merchandise).

This is why trade finance default rates are [as low as 0.01%](https://treasurers.org/hub/treasurer-magazine/icc-hails-consistent-low-risk-trade-finance-deals). Neither the exporters nor the importers are incentivised to interrupt the transaction, which makes it one of the safest forms of financing.

And yet, **there’s a huge gap for trade financing**. Usually, when an exporter ships goods, they don’t receive payment until some time later, with proof of shipment or delivery being presented. This means they’ll often get paid 60, 90 or 120 days after sending a shipment. All this ties up cash which could be used for expansion, growth and other business activities.

Trade finance hence presents a huge opportunity in emerging markets. Although the trade finance market is huge, it’s concentrated in developed countries. When exporters in emerging markets like LATAM need immediate cash, what are their options? Either banks or alternative financiers. 

Latin American banks are notorious for **being extremely risk averse,** due to the volatility of currencies in emerging markets. They also charge high fees, and it often takes months for an SME to get their funding request approved. Banks are usually not able to offer all the corporate financing needed, since regulations make it hard for them to lend.

The other option is local supply chain financiers. Although they can advance the money quickly, they also often **charge very high interest rates,** sometimes in the range of 20 - 50% per year. In other words, Latin American SMEs don’t have many options when it comes to financing, which is why there’s a big opportunity for fintech companies. 

## How we’re solving trade finance at vabble

We’ve already seen how the options for financing in LATAM countries are limited and far from ideal. As Simon Taylor wrote, “the mere fact that the [trade finance] space is overlooked creates opportunities”.

This leaves a gap in the market for a solution that can offer the funding so badly needed. 

Here’s how we’re filling that gap at vabble.

### We’re matching institutional investors to emerging market exporters

Instead of financing a company’s receivable (another way to say invoice) ourselves, we’re connecting LATAM exporters’ assets directly to institutional investors. Why institutional investors? It’s worth spending a minute explaining the thought process here.

In developed countries, institutional investors like pension funds, asset managers, insurance companies and treasuries are **constantly looking for quality assets that offer good returns.**

But it’s becoming harder than ever for institutional investors to find high quality, short-term credit products that are not exposed to government or financial institution credits.

Trade finance is one of those asset classes that does not involve these two sectors, and it’s also an asset class that has everything investors look for:

- **It’s a multi-trillion dollar asset class based on physical goods**, which makes it less susceptible to volatility from financial markets.
- **The default rates are lower than usual** (below 0.5% even throughout the financial crises).
- **If a default happens, the recovery time is shorter** than for other credit products.
- **There's a large capacity for the asset class to grow in emerging markets**, due to the low penetration of receivables financing in those markets and the fact that cross-border trade will only increase.

So how does this work with vabble? When an invoice is generated, the exporter uploads it to the platform for vabble to acquire 100% of the receivable minus a small discount. Payment terms are: up to 80%, minus the discount, upfront, and the remaining 20% or so deferred until collection. This allows the exporter to avoid waiting to the collection date to get paid in full. 

The buyer (the importer) pays 60 or 90 days later 100% of the invoice value directly to vabble. vabble then sends the exporter the deferred payment portion. The difference between the invoice value and the discounted value represents an implied interest rate. As vabble acts as a conduit for investors, just like that, the exporters **get their more of their cash on time**, and the investors, and vabble, their **return on investment**.

For a better explanation of how this works in practice, head to: [Exporters need financing and institutional investors need good investments. Here’s how we’re connecting the two.](https://www.vabble.io/resources/vabble-founding-story)

### We’re combining tech and automation to make investing easy for institutional investors

With vabble, institutional investors can easily invest in trade financing just like they would invest in stocks via a platform business like Revolut. We’re able to do that through our partner Tradeteq, a key part of the investor-facing vabble infrastructure. Through vabble, investors get full real time visibility of the portfolio. And through Tradeteq institutional investors access a proven third party managed infrastructure of note issuance connecting them with vetted assets to invest in. 

Tradeteq provides regulated entity services and acts as a program manager on behalf of the investors, providing real time NAV calculations as well as taking care of the reporting and regulation.

According to the [Commonwealth](https://thecommonwealth.org/quantitative-analysis-move-paperless-trade), moving to paperless trade could cut up to 80% of the cost of trade finance. The costs associated with using paper prices SMEs out of the global trade finance industry. vabble is participating and monitoring all advances toward digitalisation. vabble digitises every document, allowing for automation into the second screenings, KYC, KTB, KYT and AML checks to be automated, with a fully accessible auditable trail while still keeping a person in the loop.

Another piece of the tech puzzle is how to allow exporters easy access to their money. Pablo has always seen vabble as a customer centric neobank-style platform, a sort of hub that would make it as easy as possible for exporters to get access to funding, and in the future other services as well.

How does vabble execute this? Instead of going to the bank with their documentation, the exporter can [sign up to the platform online](https://vabble.io/) and upload all their corporate information online. Once approved, they can upload receivables directly onto the platform. vabble evaluates the receivables, and if they match the investors’ criteria, vabble acquires the receivable and pays the exporter the cash, minus the discount, on behalf of the investors. The vabble platform acts as an agent to the exporters and the investors through the collection and full payment of the receivables. For these, vabble has partnered with leading banking and payment services provider JP Morgan. 

[vabble demo video feb23.mp4](https://storage.googleapis.com/vabble-bucket-pre-prod/vabble_demo_video_feb23_76dd25a8b3/vabble_demo_video_feb23_76dd25a8b3.mp4)

### We’ve put in place a reliable legal framework

In order to make trade receivables investable, it’s incredibly important that the legal framework is reliable and works.

To make this possible, vabble has invested in developing the most adequate legal infrastructure with the counsel of leading firm Sullivan Law, the firm behind the creation and development of the global standard known as the Master Receivables Purchase Agreement. Hence allowing vabble to focus on trade receivables to be sold on a “true sale” basis. This means the investor is a direct owner of the asset, which is also confirmed with the obligor, trade credit insured, and in some cases with  recourse to the seller if there are deficiencies. 

The vabble infrastructure leverages cutting edge legal and technological advances to determine with a high degree of confidence the absence of fraud in connection with the receivable and that it is of a certain (high) quality, such that institutional investors are able to invest in it. vabble is set up to make that possible. 

How does vabble know if the receivable is high quality? 

1. vabble undertakes the onboarding, KYC, KYB, sanctions checks and credit monitoring of the exporter sellers in emerging markets to UK regulatory standards, and to the satisfaction of the institutional investors. vabble also links up to various local government information services and regulators to verify the authenticity of the receivables and minimise the occurrence of fraud, making sure the invoices are real. 
2. Receivables are trade credit insured – even though there are some investors that do not require it. 
3. All exporters can sign up, however only exporters who vabble is able to qualify them, and their assets, are able to transact in the platform.

Most importantly, vabble connects multiple parties that are experiencing gaps in the market:

For **institutional investors**, it’s opening up an asset class that offers diversity, quality and solid returns.
It’s exposing **trade credit insurers** to presently unseen high quality receivables.
It’s enabling **exporters** access to working capital upfront for lower cost, without adding debt to their balance sheet, without making them a debtor.

### We’re at the crossroads of major trends in fintech and trade finance

Timing was one of the key reasons that Simon Knowles decided to join vabble. As he said: “It feels like the time is right for what Pablo [vabble co-founder and CEO] is working to create.” 

He also noted that there are a number of current major trends in finance and technology that are at the heart of vabble’s business model: 

- **There’s increased demand from institutional investors for private credit assets**. Investors are looking for opportunities that aren’t in the traditional equity bond market. And what vabble offers is exposure to a private, underlying transaction between well established buyers and suppliers. These are in the form of a listed security of a special purpose vehicle containing invoices and insured by a trade credit supplier: which is the definition of a private asset to access. 
- **The yield is higher** than what an investor would get for similar risk exposure in their natural market, which of course makes it compelling from an investor's point of view. 
- **There's an environmental, social and governance overlay,** which is increasingly becoming an important element for investors. vabble is targeted towards helping emerging markets in other parts of the world economy to have improved access to developed markets pools of liquidity, to catch up, and also to help small and medium but all size businesses. 
- **There’s high demand for trade financing in emerging market countries.**
- **Lots of small and medium businesses aren't getting trade finance products from banks,** leaving a gap. 
- **There’s been an increase in global trade off the back of the pandemic**.

This creates a perfect opportunity for a platform like vabble. As Simon Knowles has said, it also means vabble should become profitable fairly early on, with a lot of opportunity to scale globally.

## vabble: a step closer to simplifying trade finance

In this article we’ve looked at trade finance and its current limitations, some of which fintech can solve. We’ve also seen the opportunities that exist, particularly in emerging markets, which is what we’re solving at vabble. 

Pablo and co-founder Derek Hudson created vabble to facilitate access to liquidity in emerging markets and to help institutional investors access an asset class that offers solid returns. vabble also allows exporters access to a cost effective alternative for accelerating working capital, without making them a debtor. 

A combination of timing, technology and opportunity to make an impact means that trade finance is indeed “the end boss of fintech”

_To learn more about investing in vabble, email investors@vabble.io
_

thumbnail_trade finance.jpeg

trade finance.jpeg

“Fixing trade finance is the most significant impact we can have in the real world.” Read more about how fintech can help fix trade finance.

Why trade finance is the next big opportunity in fintech

Simon Knowles (Goldman Sachs Asset Management Technology MD), with over 20+ years asset management tech experience, is joining vabble as partner and member of the leadership team. 

In this article, we talk to Simon to find out exactly why he feels this is the perfect time to get involved with vabble.

_To learn more about investing in vabble, email investors@vabble.io_

## Simon’s background: adding asset management technology experience to an already strong leadership team at vabble.

“I joined Goldman as a new graduate at the peak of the dot com boom in 2000. I don't regret anything about my Goldman career – it's a fantastic organization.” 

With a Computer Sciences degree from Manchester University, Simon knew he wanted to move to London to start his career in the capital, and that’s exactly what he did once he graduated. 

“As a technologist and software engineer, I have always enjoyed writing software for the people I work with; partnering with key stakeholders to drive business efficiency and growth.” Throughout his career Simon has spent every day **talking to and working with his key clients.** 

Over time, the scale, complexity and scope of the work increased, and with experience came more responsibility. “You very quickly move from delivering a feature, to becoming responsible for an application, then a suite of apps, then a platform, then a **global team.**”

Simon was promoted to Managing Director at Goldman Sachs in 2019.

Two years ago, the opportunity came up for **Goldman Sachs to acquire the National Netherland Investment Partners firm (NNIP)** based in The Hague. 

Since vabble is working closely with NNIP, **it’s the GS acquisition that brought Simon together with Pablo Terpolilli**, vabble co-founder and CEO. 

Being at the intersection of asset management and technology at Goldman gave Simon a unique set of skills: he learnt how to **automate and scale complex workflows while coordinating and cooperating within the corporate world**.

These skills are perfect for his next role in a different company: vabble.

## Why Simon is joining vabble? “I got very excited and interested”

“From the first conversation with Pablo his vision to connect Emerging Market receivables with Institutional Investors made sense to me.  **I got very excited and interested.**  I am a big believer in fate and embracing new opportunities as they arise.” 

Timing, the technology and the company culture are the three key reasons Simon decided to join vabble. Let’s look at these in more detail.

### Timing: high demand, high yield and increase in global trade

“In life - timing is everything,” Simon said. “It just feels **like the time is right for what Pablo is trying to create.** It's really at the crossroads of a lot of different macro themes that are happening in the market.”

Why is the timing for vabble so perfect? The first factor is **high demand**. “From an asset management standpoint, there’s an appetite for more private credit investment. Institutional investors are looking for returns away from the traditional equity/bond market; especially investment grade, high-yield investments.  vabble plays in that space.” 

_(If you’re new to the trade finance space, we recommend you read our founding story: [Exporters need financing and institutional investors need good investments. Here’s how we’re connecting the two](https://www.vabble.io/resources/vabble-founding-story))_

Also important among socially-conscious investors is the **environmental, social and governance aspect**. “There's a social aspect to it,” Simon said, “because you're helping the emerging markets, you're helping other parts of the world economy to catch up, and also helping small and medium businesses.” 

“You then have the **increase in global trade** off the back of the pandemic and before, plus the **trade finance gap** where lots of small and medium businesses aren't getting the trade finance they need from banks. There needs to be some disruption in the market.” 

And this is where vabble comes in, with the right model and the opportunity to scale and go anywhere in the world. 

Why is the opportunity for trade finance now and not, say, 10 years ago? “I think the main reason why asset managers haven't done trade finance in the past is a **lack of transparency**.” Simon explained. 

“As an asset manager, you want to know what you're investing in. You can't buy something if you don't know what's behind it. And in a world where trade finance is all paper based, to try and apply any filtering or screening on top of the invoices that you've purchased is very time consuming. The trade finance ecosystem is pushing heavily towards a digitised and automated world, where all the information is **digitally available and transparent to the investor**.  This is precisely what the vabble platform provides.”

Everything vabble captures and **uploads is digitised**. You therefore have full transparency to the buyer’s side industry on which companies are part of the SPV, and this means you can automate the second screening, KYC and AML checks. 

To summarise, the timing is right for a few reasons:

1. There’s high demand for private credit investment.
2. This type of investment is high yield.
3. There’s an environmental, social and governance aspect that socially-conscious investors will appreciate. 
4. There’s been an increase in global trade over the past few years.
5. The tech allows for full transparency to the buyer.

![timing slide.png](https://storage.googleapis.com/vabble-prod/timing_slide_f49ffc6be1/timing_slide_f49ffc6be1.png)

And unsurprisingly, given Simon’s background, the technology is another part of what attracted him to vabble. 

### Technology: “vabble is well positioned to capitalize on this technology wave”

The great thing about vabble’s technology is that it’s not trying to solve new problems. As Simon says, “We're not trying to invent anything that's brand new, or needs research and development time to get right.”

“For me as a technologist, that's perfect, because Pablo already knows exactly what he needs. The vision is set and the team is in full execution mode.”

**vabble has a highly motivated and collaborative technology team** with a well designed data model and **modern tech stack** creating a neobank-like experience for Trade Finance. Simon’s experience of building similar platforms for institutional investor clients at Goldman will only enhance this. 

It is an exciting time to be a Technologist with public cloud adoption making it quick and easy to get to market coupled with the maturity of blockchain, artificial intelligence and machine learning. vabble is well positioned to capitalize on this technology wave in order to bring a scaled platform to the vabble clients.

To learn more about our technology and how it helps to set us apart read our article: [How our people, technology and capital make us different](https://www.vabble.io/resources/vabble-competitive-advantage). 

### Company: “I put a lot of faith in the founding fathers of vabble”

Finally, Simon explains that timing and technology wouldn’t mean anything if it wasn’t for the excellent team vabble has, calling out Pablo Terpollili (CEO/Founder), Derek Hudson (co-founder, director and Chief Commercial Officer), and Francesco Baldanza (director and strategic investor) in particular.  

“Those three people have 50 years experience with trade finance, and they know the legal process, they know the framework and they know how to get vabble right,” Simon said. “I put a lot of faith in the founding fathers of vabble. All of that background and experience is very, very hard to replicate.” 

The reputation and connections Pablo, Derek and Francesco have are what has helped vabble to secure partnerships with:

1. **Tradeteq**: To connect with institutional investors.
2. **JP Morgan**: To enable payments, collections and reconciliation.

“In 18 months, Pablo has been able to get the number one people involved in what he's trying to build. It's all about the **relationships and the trust and the history**,” Simon added. 

And from Simon’s point of view, much of what Pablo is trying to achieve is what Simon himself has had experience of with Goldman: putting together a global team, building a platform and taking a concept from inception through production and beyond. 

On Pablo himself, Simon is impressed, citing in particular his honest, transparent, upfront approach to business. “He's not particularly guarded about what he's trying to do. He's happy to share, to open up and get input and early feedback,” Simon commented, echoing colleague Colleen Connors almost word for word. 

_Learn more about the vabble culture in this article: [vabble's Unique Culture DNA: Transparency and Talent](https://www.vabble.io/resources/our-culture)._

Combining Pablo, Derek and Francesco’s experience and reputation in the finance industry with a transparent and flexible approach to business is a big part of what makes vabble an appealing company to join. 

## What Simon hopes to achieve at vabble: helping to create a robust platform

Simon is confident that his experience will allow him to bring a lot of useful insight to the vabble leadership team.  

Simon’s has been on the lookout for trade finance trends over recent months, and he knows now is a good time to take this opportunity. With vabble, it feels right – and that goes for the timing, the technology and the company itself. 
 
Simon is joining vabble at the perfect time to make a big impact in a time of huge possibilities for the company. With his vast experience in asset management technology, we know he’ll prove to be another valuable member of the vabble leadership team, and we’re thrilled to have him on board.

For more about how Pablo built the vabble team, read: [vabble's Unique Culture DNA: Transparency and Talent](https://www.vabble.io/resources/our-culture).

_To learn more about investing in vabble, email investors@vabble.io_



thumbnail_simon knowles.jpeg

simon knowles.jpeg

Simon Knowles (Goldman Sachs Asset Management Technology MD), with over 20+ years asset management tech experience, is joining vabble as partner and member of the leadership team. 

vabble FinTech attracts Goldman Sachs Tech MD veteran. “It’s just the right time for this”

If you don’t know enough about the team behind vabble, it’s easy to assume we’re just another tech company.

In reality, the people who are involved in our business and the way we all work together is what makes it so special.

Since we’re asked about our culture a lot, we're writing this article to explain how it’s unique and the way it contributes to the success of the company.

_Note: vabble is currently raising investment. Want to learn more about how to invest? Reach out to investors@vabble.io to learn more._

## Our founders: where vabble’s culture begins  

“I worked in high demand environments with high expectations, surrounded by competitive, professional, high calibre people, and I loved it. I think it's when I felt at my best.”

![pablo pp.jpeg](https://storage.googleapis.com/vabble-prod/pablo_pp_99c27fef03/pablo_pp_99c27fef03.jpeg)

That’s how Pablo Terpolilli, vabble’s co-founder & CEO, describes the working environment that he thrived in, and that he wanted to create at vabble.

Pablo says that while it’s true that top performers need to be highly competitive to get the job done, it’s also important that they’re directing their efforts towards the good of the company as a whole to prevent the culture becoming toxic. 

This is why Pablo was clear about **what he didn’t want in a company culture**: “The bad things you see elsewhere like sneakiness, hiding information, lack of transparency, lack of ownership.” The ideal working environment is one with no big egos where everyone is working for the common good. As you’ll see below, he’s worked hard to make sure that doesn’t happen at vabble.

Pablo’s reputation and contacts have also helped vabble attract the backing of some of the largest financial players in the world: JP Morgan is vabble’s house bank and payment services provider, and their solution has been developed with institutional investors such as Goldman Sachs Asset Managment on board. 

In summary, Pablo has years of experience working in high-profile financial institutions, including:

- 5½ years at Goldman Sachs running the private financing business of Latin America.
- 2 years at Standard Chartered running the Western Hemisphere private financing business.
- 3 years at UBS co-running the EMEA special situations financing group.


Pablo is joined by vabble's founding partner, director and Chief Commerical Officer, Derek Hudson. He and Pablo have known each other for over 30 years.  And like vabble's founder Pablo, Derek brings an unparalleled depth of knowledge and experience to the vabble team.

![derek pp.jpeg](https://storage.googleapis.com/vabble-prod/derek_pp_bdd4291687/derek_pp_bdd4291687.jpeg)

Derek has spent over 35 years working in Latin America correspondent banking and trade finance. Over the years he has built up an impressive reputation and become a key player in the space. And in fact, ITFA named Derek one of the top five people who have most impacted the trade finance industry over the last 30 years.

Derek has as much energy and drive as a 20-year-old, but with the additional expertise and experience that go along with the number of years he’s been in the industry. Not only is he a phenomenal salesman, but he’s trained and grown very successful sales teams over the years. “We will avoid many, many pitfalls by having someone like Derek [on the team],” Pablo explained.

vabble is attracting talented people because Pablo is up front about the fact that while there's a lot to be done, you can create your own space and really contribute to the company. That’s one of the main reasons why Colleen Connors (Strategy & Operations) joined vabble – that, and Pablo himself. She describes him as: “a really great person as an individual. He is upbeat, he is caring, he is personable. **He is someone who success follows.”**

![colleen pp.jpeg](https://storage.googleapis.com/vabble-prod/colleen_pp_9aa9f52e67/colleen_pp_9aa9f52e67.jpeg)

Colleen is clear that she has worked with great, ethical people in the past, but in general they can be hard to find in the financial world. “When you find a good one, it’s hard to say no to them!”

This is reflected in Pablo’s keenness to create a working environment where everyone has their own responsibilities and owns their tasks, but feels able to speak out if anything doesn’t feel quite right.

“I encourage everyone to raise their hand if there’s anything they’re not comfortable doing, or if they feel out of their depth, and say: ‘this is not for me.’ It's very, very important that I provide the space for people to be able to do what they feel they can do best, where they can shine, and not force anyone to be in the wrong position.”

Pablo wants the team to contribute towards the growth of the company in a way that fits their skills and experience, but also to **know exactly what vabble is trying to achieve as a company.** “It’s important everyone understands what we're doing, why we're doing it, and how we're different.”

He’s confident that this depth of experience will allow the company to almost run itself, and Colleen agrees that Pablo’s trust in the people around him means he can focus on the tasks that only a CEO can do, like fundraising.”[Pablo lets] other people do their jobs, make decisions and run the things they need to.”

**Read more about how vabble’s founding story here:** [Exporters need financing and institutional investors need good investments. Here’s how we’re connecting the two](https://www.vabble.io/resources/vabble-founding-story)

## The team: vabble’s main asset  

In one of their weekly calls, the primarily Argentinian team are chatting in Spanish. Colleen joins, and they instantly switch to English. Colleen explained: “Depending on who is there, there’s an adjustment to make sure everyone feels welcome, regardless of nationality, country, or language.”

This is vabble’s culture in a nutshell: **cross-border and international**, yet still **inclusive and welcoming**.

vabble is a tech company, but our people are our main asset. Pablo is very clear that it’s important for the team to be full of top notch people, as that’s what helps everyone work at their highest level. “Everybody who is in the team improves the team,” he said. “That's an absolutely key element for a startup and for us.”

Much of the team is based in Argentina, local to the Latam market, in the same time zone of the clients we’re working with, and they link in with on the ground bankers in Peru, Ecuador, who have relationships with exporters. Others are based in London and elsewhere in Europe. “Pablo pretty much handpicked everyone that’s here,” Colleen said. “He has a personal connection [with them]. Some of them he's known for 20 years, some longer.”

We’ll highlight the background of just two of the team here, but you can head to our [About page](https://www.vabble.io/about) to learn more about the rest of our team.
 
1. **Francesco Baldanza (Director & Strategic Investor):** Francesco is another team member with a huge amount of experience and knowledge. He was a senior partner at McKinsey, advising hedge funds. At vabble, he’s very much involved in the operations and strategy and making sure everything ties together.

![francesco.jpeg](https://storage.googleapis.com/vabble-prod/francesco_d0c87e446a/francesco_d0c87e446a.jpeg)

2. **Colleen Connors (Strategy & Operations)**: Colleen has 12 years of experience running tech startups, and has been a founder of a tech company herself. Like Pablo, Colleen is an alumnus of Babson, the [number one college in the US for entrepreneurship for 30 years](https://entrepreneurship.babson.edu/best-mba-entrepreneurship-30-years/). Because she’s worked with multiple startups, her priority is helping the vabble team not make mistakes. She breaks down the overall vision into what needs to happen in the next three months. Currently, she’s looking after a lot of vabble’s operations, handling legal contracts and third party technology contracts for example.

She has 8 years’ experience in the financial world, formerly working as a global fixed income fund manager at Schroder Investment Management. Verif-y, one of the tech startups she helped grow from scratch, is a digital identity platform, which gave her even more valuable, relevant experience in analysing an exporter and making sure they are trustworthy. 

**What unites the team?** “I think everyone cares about growing something,” Colleen said. “I think people are excited about starting something new; seeing it grow and seeing what it becomes – and seeing the contribution they put in, day in and day out, become this bigger, live thing, and not just an idea.” 

Much of the team comes from a corporate background, where you don’t see growth like you do when you work at a startup. That’s another reason why Colleen joined vabble. “I'm able to contribute personally. So my experience, my background, my expertise, at this point in my career, works very much with what vabble is trying to do.”

Even though most of the team is in Latam, the vabble culture still thrives online. The combination of enthusiasm from the team, employees with many years of experience and the maturity of the founders helps everyone flourish. And that contributes to vabble’s key values and overall mission as a company.

 ## vabble’s culture: what is it like day to day? 

“A good culture is being able to give direction to that competitive drive some people have, and direct it towards the good of the whole,” Pablo said. “We want to allow space for that competitiveness to be expressed in the context of the team, and not bash anyone in the process.” 

At the weekly team call, everyone shares what they’ve been working on, any problems they might be having or anywhere they need input from another team member. In addition to this, there’s a **sprint demo call every two weeks** during which the tech team shows the new release, what features have been added, and any new functionality so the rest of the team is always in the know. Investors, contractors and third party providers are all welcome to join these calls.

Global teams everywhere have to use video calls and work out time zone differences to get together, and this is something the vabble team has to navigate too. “Since we can't just meet at a pub here in London, how do we stimulate other conversations?” Colleen said. “Well, you have to figure out how to do that virtually. And it's actually not that hard – people are excited to hang out.” 

At Christmas, the team substituted their weekly meeting for a virtual cocktail hour. We encouraged the team to bring their families along, and we only talked about fun, personal stuff – no work chat allowed. 

We make the effort to chat about personal things at the start of any call, just to get to know each other better. “People are pretty good at that even in our weekly meetings, though, just saying, ‘Hey, how's your week been? What's going on?’” Colleen added.

The team is in different hemispheres, so there are always conversations about the different weather. And another way the team builds rapport is from a cultural standpoint, by sharing a bit about where they are locally. “This is what attracts people to working in a global atmosphere,” Colleen said. “I think people really enjoy that cross-cultural experience.”

We also encourage people to meet up in person where possible. Those in Buenos Aires have met for coffee, and there was an outing to the horse races in Chichester one weekend too. 

On a day to day basis, vabble’s team is hard at work – but the sense of camaraderie never ceases.

## vabble’s key values and how they contribute to our success  

“Founders tend to be scared and they tend to not want to be open about what is being built,” Colleen said. But Pablo’s approach “creates a very warm, nurturing environment where others then feel open to speak their minds.” 

For Pablo, the key values behind vabble are **openness** and **transparency**, along with **execution**, **fairness** and **wellness**. This shows in the way Pablo leads: for example, he welcomes investors to the fortnightly sprint demo meetings to learn more about new features along with the team, which is very rare for a tech CEO.

The vabble culture starts with the CEO and the rest of the team feeds off that. And this shows in the work they do.

“We want to make an impact,” Pablo said. “We think that the work we’re doing in emerging markets is great because it's going to allow us to build a valuable company. And the value of the company can be measured in wealth, but more than wealth – it can also be measured in the wellbeing of the people that are impacted or associated or touched by the venture.” 

“I want to know how many people we touch. Not just how many clients, but also the clients’ clients, and their employees. I want to have a better understanding and ability to show the social impact of what we are doing. We are getting institutional funds from developed markets to flow into emerging markets!”

When we asked Colleen about vabble’s values, she said three values that come to mind for her are **integrity**, **teamwork**, and **respect**. “These are what I see in how people interact. I see the respect people give each other. I see the integrity of the work that they produce. I see the integrity of the ethical standard in which they're doing it, and [also in] the way that they work together as a team.”

The values stated by both Pablo and Colleen amount to the same thing: working to your strengths both as an individual and together as a team, and doing so in an open, ethical and moral way.

Pablo sums it up with: “Our company is based on relationships: relationships with clients, relationships with investors, and our team that developed the technology to make it seamless, transparent, and remove friction.”

Our people, network and contacts are a crucial part of what makes us stand out as a company. Without them, there is no vabble. This is why creating the right team was Pablo’s priority right from the beginning. 

It’s also this that has enabled the feeling of cohesiveness and warmth in the company, even with people in two separate hemispheres. With the team Pablo and Derek have, they know they can overcome any of the challenges they face.

To learn more about how we address cost of capital and how our technology works, check out: [How our people, technology and capital make us different](https://www.vabble.io/resources/vabble-competitive-advantage)

_To learn more about investing in vabble, email investors@vabble.io_



thumbnail_vabble team.png

vabble team.png

Learn about why vabble's culture is unique and what day to day at the company looks like.

Uncovering vabble's Unique Culture DNA: Transparency and Talent

vabble's unique culture DNA: transparency and talent

When people first learn about what we’re doing at vabble one of the first questions we get is: **how do we address issues with cost of capital and price our products competitively across the region?**

Although there is an implied cost of capital with our work, it is by definition lower than most other financing activities. At vabble, we don’t lend money. Instead, we are **buying an asset on behalf of institutional investors** (i.e. pension and insurance funds). These institutional investors allow us to offer our workflow automation with an implied low cost of capital and in turn pass that benefit on to the users of the platform.

This is a key part of what makes us different from other financing options for exporters across emerging markets – be that Latin America, Africa, or Asia. We don’t have a standard loan pricing business model and we are not bound by typical banking concepts, which is why it’s beneficial to understand how our business model works and where our competitive advantage lies.

In this article we’ll make it clear exactly how vabble addresses cost of capital by covering the following:

1. What’s our competitive advantage as a company?
2. Capital: we’re not a lending business, we’re connecting investors to assets and offering exporters access
3. Technology: exporters and investors are two sides of the same coin, and can do it all online, from one platform
4. People: we’ve got all the right connections in the right place, people and technology
5. How vabble makes money

_Note: vabble is currently raising investment. To learn more about how to invest in vabble, contact investors@vabble.io._

## What is vabble’s competitive advantage? 

We often get asked: what makes you stand out, and how do you know someone can’t come in and copy what we’re doing? 

In other words, what is our [moat](https://www.digi-corp.com/blog/understanding-what-are-moats-and-their-importance-in-the-startup-ecosystem)? Our sustainable competitive advantage?

vabble’s moat is a combination of elements that other companies just aren’t able to put together as they are bound to other business models. Those elements are: our access to institutional investors, our technology and our team, on and off the ground.

**To learn more about our story, head to:** [Exporters need financing and institutional investors need good investments. Here’s how we’re connecting the two.](https://www.vabble.io/resources/1)

Let’s dig into three key aspects of our competitive advantage:

1. Capital
2. Technology
3. People


### Capital: we’re not a lending business, we’re connecting investors to assets and offering exporters access

vabble’s focus is on monetising assets, creating liquidity, and lowering debt, particularly in emerging markets with limited access to capital, while also offering institutional investors an opportunity to invest in a completely new (untapped) market that for Latin America and Caribbean alone stands at $655 Billion of payment flow from UK, EU, and US. Our approach is to monetise these cross-border export receivables payable by UK, EU, and US buyers. 

Unlike many lending businesses that focus on emerging markets, **our model does not rely on finding borrowers to pay high-yield rates**. Instead, we focus on allowing institutional investors to buy high quality receivables (while offering liquidity and helping the exporters) and therefore get a higher return than on comparable assets. With this approach, no one becomes a borrower: the exporter is simply getting the payment they’re due, earlier, with a small discount to account for the time value of money, and vabble’s workflow automation.  

With vabble, there is no direct cost of capital comparison because alternative capital is typically in the form of debt, and of limited availability. Instead, when an institutional investor purchases a receivable, they are providing liquidity from their cost of capital, and a required return. Since we’re dealing with high quality assets and institutional investors, **our implied cost of capital for providing liquidity turns out to be incredibly competitive.**

It’s important to note that we unfortunately can’t work with just any exporter: we’re working with exporters that have receivables from well known European and American companies, that can also be backed by trade credit insurance. 

That’s why it’s as if investors are investing in receivables from companies in Europe or the USA – the only aspect that’s different about them is their location: exporters are based in emerging markets as opposed to a supplier in say, Dusseldorf. That’s how we can make available a high quality receivable for a good price to the investor, as well as liquidity at a good price to the exporter. Insurers also welcome this additional business with open arms, as is executed with high visibility and full transparency.

To make this clearer: think about the price of a bottle of water in the supermarket (where you might pay 95p) and compare with the price of a bottle in an airport (where you might pay £4). As property investors say: location, location, location. **The quality of the product is no different, but the price is largely a factor of where you’re buying it.**

There is a flip side to this dynamic at play with the assets vabble enables institutional investors access to. We’ve found a great interest in exporters offering in emerging markets, and we are starting with Latin America.

After cash, the most liquid asset for an exporter is a good receivable – but exporters in emerging markets have few options to turn those receivables into cash. Before vabble, they would have had few private credit options, in local currency and at very high rates of interest. Any of these alternatives are very restrictive, often asking for personal guarantees if available at all. This is why there’s an estimated SMB trade finance gap in Latin America of at least [$350B](https://www.pymnts.com/news/international/2020/closing-latin-americas-350b-smb-trade-finance-gap/).

For the exporters we work with, vabble can provide them with the cheapest marginal additional unit of capital they will be able to secure. Simple, smart, and always on. As long as they do business with high quality companies, the exporter can continue to have access to this source of financing.

It works wonders because **the exporter does not become a debtor.** There is no loan, which means there is no additional debt in the user balance sheet, and the convenience of accessing cash immediately makes **vabble a perfect tool to become a key part of the exporter working capital stack.** 

All the costs associated with selling the asset are reflected in the discounted price of the receivable. vabble fronts the purchase while the asset is effectively sold back to back and bought by an institutional investor. The convenience of accessing capital on the platform, soon after the exporter invoices and ships, without going to any bank and without taking on debt, makes vabble the perfect **addition to the working capital stack of companies in emerging markets**.

For the companies and receivables that qualify, vabble is the simplest and smartest most competitive additional unit of capital. 

![Diagram redesign_Vabble-01.png](https://storage.googleapis.com/vabble-bucket-pre-prod/Diagram_redesign_Vabble_01_d4eb0aead8/Diagram_redesign_Vabble_01_d4eb0aead8.png)

vabble’s main goal is enabling faster payments through helping exporters turn quality assets into liquidity. Now come into play the other two elements of our competitive advantage: our technology and people.

### Technology: exporters and investors are two sides of the same coin, and can do it all online, from one platform

The idea behind vabble is: **let’s connect institutional investors to emerging market  exporters with high quality receivables through a neobank-like platform.**

The technology allows investors to seamlessly enact every step of investing in the trade finance asset class using workflow automation, and that same automation enables exporters to access liquidity by selling their quality receivables. This is one of the reasons our platform stands out in the market, along with full transparency and the absence of balance sheet risk. 

We’ve invested a significantly into making vabble a unique source of truth neobank-like platform, allowing exporters to upload invoices and get funding with just a few clicks or finger taps. Through the use of Tradeteq, institutional investors can easily get access to those invoices.

To make trade receivables investable, it’s vital that the legal framework is reliable, to allow trade receivables to be sold on a “true sale” basis. vabble has retained the counsel of Sullivan & Cromwell, who developed the global standard for receivables purchase agreement.

With exporters in emerging markets and investors in developed markets using the same framework agreement, vabble can offer convenience to exporters as it is a well known, tried and tested type of agreement. To top it off, there’s no need to deal with a bank: just upload information about the receivable to the platform, and vabble checks:

1. The buyer, or obligor, confirming the invoice 
2. It can be trade credit insured
3. It’s not fraudulent

Then, cash is paid to the exporter’s account of choice by vabble’s bank, JP Morgan. At this point, vabble does not offer FX or hedging capabilities, but these are on the product offering roadmap.

[vabble demo video feb23.mp4](https://storage.googleapis.com/vabble-bucket-pre-prod/vabble_demo_video_feb23_76dd25a8b3/vabble_demo_video_feb23_76dd25a8b3.mp4)

At vabble, we’re not a bank and we are not a financier. We know finance, but we’re a technology company. And that unit of capital – what vabble is offering to the exporter – is not debt, but liquidity. This means:
 
- **There are no adverse selection issues:** since we’re not a bank, we don’t have conflicts of interest with other financing activities.
- **We can respond to the requirements of institutional investors** and present them with opportunities. For example, we know the institutional investors mandate is investing in assets rather than companies, and want full transparency and visibility.
- **We’re offering investors the flexibility to pick the assets they want**, in the same way you can choose your dishes from the conveyor belt in a sushi restaurant. 
- **Exporters can manage their working capital without becoming debtors**, therefore getting cash faster without increasing liabilities.

Two other key parts of our technology are our partners: 

1. **Tradeteq,** which connects with institutional investors
2. **JP Morgan,** which enables payments, collections and reconciliation

**[Tradeteq](https://www.tradeteq.com/) is a trusted third party that is a key part of the vabble infrastructure**, allowing institutional investors to commit capital and look for and monitor and report on the assets they invest in. Tradeteq provides regulated entity services and acts as a third party program manager that earned the trust of the investors. It provides real time NAV calculations and takes care of the reporting, regulatory and data residency requirements while offering a clear view of the investor portfolio.

JP Morgan, on the other hand, manages segregated funds for the investors without commingling and takes care of all the payments, with great coverage in Latam and worldwide. We’re integrating the JP Morgan payment system into vabble, to enable payments, collections, and reconciliations directly within our platform. 

But all of this is still replicable, if it weren’t for the last jigsaw piece of our competitive advantage: our people.

### People: we’ve got all the right connections in the right place
 
Pablo Terpolilli founded vabble in 2021, with Derek Hudson joining the business as founding partner shortly after. Both are former bankers with vast experience in emerging markets, on both commercial and banking sides. 

Between them, **Pablo and Derek have 65 years of experience in banking and finance**. Some of Pablo’s experience includes: 

- 5½ years at Goldman Sachs running the private financing business of Latin America.
- 2 years at Standard Chartered running the Western Hemisphere private financing business. 
- 3 years at UBS co-running the EMEA special situations financing group.

Pablo’s reputation and contacts have helped vabble attract the backing of some of the largest financial players in the world, with JP Morgan as the house bank and the main payment services provider, and Goldman Sachs and other institutional investors as investors in receivables.

The institutional investors working with vabble know Pablo, in many cases having worked with him for years previously. They trust his judgement and appreciate how transparent he is in his operations. They also know he understands emerging markets and the Latam region well, and can engage with both the exporters and their suppliers. 

Beyond that, Derek’s deep and vast network and experience in the region helps the entire commercial, onboarding and KYB processes. Compliance with institutional investor standards of KYC, AML and sanctions checks are paramount at vabble, and carried to the highest standards.

The fact that Pablo and Derek know Latin America so well is exactly why vabble is starting out in Peru and Ecuador, before expanding to Brazil or Mexico. Not just that, but vabble attracts top talent globally, and has experienced bankers on the ground that know the trade and have prior relationships with many of the exporters, which were their clients while they worked at their respective institutions.

Pablo is from Argentina himself, and **hand-picked every team member on the vabble team**. His partner, Derek Hudson, is one of the best known people in the trade finance space, and was recently recognized by his peers at the Annual ITFA Conference in New York as one of the top five people to impact the trade finance industry over the last 30 to 40 years. 

Derek and Pablo have known each other for over 25 years – when Pablo discussed the idea with him, Derek immediately understood it as a win-win business, and was ready to sign on. He’s worked for over 35 years in Latin America correspondent banking and trade finance activities, and started several Latin American lending departments from scratch. The last two banks he worked for reached over US$1 billion in exposure through the regions. 

Colleen, one of vabble’s key operators, is a former portfolio manager at Schroders, and has run and operated two startups for the past 12 years. Pablo and Colleen met at a Babson Graduate gathering in London (the number one school for entrepreneurship in the world, of which both Colleen and Pablo are graduates), and she joined the vabble team because the company marries two things Colleen has a lot of experience in: finance and tech.  

Then there is Francesco, a former McKinsey partner, and Simon, who has recently joined from Goldman Sachs Asset Management where he was a Managing Director, with primary responsibilty for technology development.  The vabble team have backgrounds at Goldman Sachs, McKinsey, UBS, Merrill Lynch and so much more. The list goes on – everyone at vabble contributes in their own strategic way, and that brings a diversity of experience that makes them integral to the culture, and the mission.

## How vabble makes money

So how do we make money?

Simplicity goes a long way. From the beginning, our objective is to have very simple pricing. We have not implemented a SaaS, subscription model, and we don’t include the day-to-day operation costs in our pricing. Those costs all come off our margin, so we have no hidden fees.

**Our primary revenue source is a percentage cost plus a per-transaction spread, charged on top of the institutional investor's required return base cost.** Exporter companies pay this fee through a discount to the receivables' face value. It is a usage based model, of a compelling proposition: getting invoices paid ahead of time. Even during the best of times that is a tall order.

Here’s an example of how this works in practice:

1. vabble receives a good receivable of $1,000,000 that’s payable in 45 days.
2. We buy that asset out of a special purpose vehicle (SPV) entity in Luxembourg.
3. The institutional investor funding the vehicle states their requirements for the assets they want to buy, such as: 
a) High grade companies
b) Insured
c) Avoids certain merchandise like oil, firearms, tobacco 
d) Maintain certain concentration limits on seller and buyer sides
e) Monitor any commercial disputes and non-payment events
4. The institutional investor also states their required rate of return, and vabble adds a margin on top. Then, for the sake of the example, let’s say the implied discount rate is 10.5%. vabble purchases 100% of the receivable on behalf of the investor, and the payment terms are 80% of the invoice value upfront minus the implied interest cost($800,000 - $10,500 = $789,500), and 20% is deferred to the original payment date ($200,000).
5. The exporter immediately gets $789,500, and receives the 20% that’s left when the invoice is paid by the buyer. Normally after the 45 days, plus or minus any adjustment to actual pay date
6. The investor’s interest income is therefore at a rate of 10.5%, which for 45 days pro rata is equivalent to $10,500
7. vabble aims to make a 2.5% per year gross margin equivalent in the internal purchase and resale of each receivable. 

![Screenshot 2023-05-17 at 10.16.30.png](https://storage.googleapis.com/vabble-bucket-pre-prod/Screenshot_2023_05_17_at_10_16_30_8588d2d0f4/Screenshot_2023_05_17_at_10_16_30_8588d2d0f4.png)

By purchasing receivables rather than using financing, this model gives exporters that use vabble an advantage over the exporters that use traditional financing methods: a win-win situation.

We’re also looking forward to offering more options and exploring additional revenue channels, such as compelling FX rates, and some other supportive services such as hedging, or other scheduling and automations around fast payments. For example, as we process data, we’ll be able to provide plenty of insights to our users based on usage patterns and uptakes.

## Learn more about investing in vabble

In this article, we’ve explained vabble’s moat and how our capital, technology and people are what allow us to have a sustainable competitive advantage in the market. A market that remains “unseen” at $655 Billion payment flows per year, just to Latin America and the Caribbean, from buyers in the US, UK, and EU.

We're combining technology, a vision, and access to institutional investors, backed with many years of experience and knowledge of the valuable Latin American market, plus a network of contacts that trust and respect vabble’s co-founders Pablo and Derek and the team they’ve put together, breaking silos, connecting dots that were not previously connected.. 

All of this adds up to create a business model that is not easily replicable, and means we can offer a unique proposition: uncovering an untapped very large market to provide fast payments to exporters, advancing cash against quality receivables at a competitive price, and offering high quality assets to institutional investors. 

To learn more about investing in vabble, contact investors@vabble.io.

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people round table.jpeg

Learn about how our people, technology and the way we manage capital makes us different.

How our people, technology and capital make us different

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In this story, we’re going to dive into the gaps Pablo, founder of vabble, noticed in the trade financing market, and how vabble is planning to solve those.