Building a New Payment Solution to Help B2B Transactions

Topi, a Berlin-based firm that raised a $4.5 million pre-seed investment round co-led by Index Ventures and Creandum, is working on a payment solution that is both quick and capital-efficient for enterprises. On the commercial side, consumer payments have radically improved in recent years. Customers want to be able to select from a variety of payment options while they wait to pay their bills.

You’ll find out how to use your debit or credit card to pay for the appliance, which may help you save money on interest. You can also use PayPal to make payments. Klarna, Affirm, Afterpay, and others are options for dividing a large purchase into smaller monthly installments.

Despite this, B2B transactions have not changed dramatically. Businesses frequently confront a simple question: should they pay directly or negotiate a financing offer? A supplier may provide immediate financing alternatives. Companies have occasionally requested their bank’s assistance. It is a time-consuming, manual, and bureaucratic procedure in every case.

Topi’s goal is to find the right Venn diagram for B2B payments: a payment solution that demands no paperwork but offers some financing options. Topi thinks it can provide financing terms of up to five years with rapid approval.

Estelle Merle, one of the co-founders, explained to me, “We’re creating everything ourselves. We’re currently building the first product, which will be available on the market during 2022.”

Topi plans to integrate its payment solution directly into checkout flows of leading B2B businesses, making this a viable option for high-ticket items such as a new machine, a major event, or an upgrade for the restaurant kitchen. Topi expects to be able to integrate its payment platform directly into checkout flows of popular B2B companies.

Some merchants already provide financing options, but they typically just link to a support page with some information for interested consumers. “We’re digitizing this paper-based procedure and bringing it right to the point of sale,” Merle added.

This isn’t simply a technological problem; there’s also financial risk associated with SMB financing. The business needs to be able to make sound judgments without receiving undue input from the customer. In only a few minutes, a client should be able to figure out if they qualify for available financing choices.

“We have our own risk team,” co-founder Charlotte Pallua informed me. “What we don’t want to do is ask SMBs to upload financial statements from three years ago. Everything has to be digital.”

I met Topi for the first time. She told me about data sources and how to use them. For example, Topi might obtain sales data from a payment processor or e-commerce performance from a Shopify account. You could also think of using your company bank account login information to let Topi retrieve the previous few months of transactions as open banking spreads across Europe.

Charlotte Pallua and Estelle Merle, two of Topi’s cofounders, met while attending Harvard’s MBA program. Pallua spent some time at Apple working on financing programs, while Merle has previously worked for Goldman Sachs and Via Transportation. Ernesto Jimenez is the CTO of Topi, having previously worked for GoCardless as a senior engineer.

Topi’s vision extends beyond lowering payments. If the firm is able to establish itself as an important component of B2B transactions, Topi users may find themselves spending a significant amount of time on the company’s portal. Customers could purchase insurance plans from Topi directly using the site. There are several options for expanding vertically once you’ve got control of the customer connection. And Topi is certainly aware of that potential.