Pilon, a Singapore-headquartered FinTech firm that offers cloud-based Supply Chain Financing system, announced today that it has successfully raised a seed round of USD 5.2 million (both debt and equity). Wavemaker Partners led this round, with participation from Octava Pte Ltd and Polaris Kin Pte Ltd.
The venture built company enables Southeast Asia’s small and medium-sized enterprise suppliers and their corporate buyers to digitise their factoring processes and unlock cash flow by accessing credit from financial institutions–all via web and mobile interfaces using a cloud-based engine.
Pilon will use the funds raised to improve its digital product offerings, expand its footprint in existing markets like the Philippines and Cambodia, and make their foray into either Vietnam, Thailand or Indonesia within the next one year.
With the new funds, the company will also scale up business acquisition and talent in areas like marketing and technology. Pilon currently has 14 people across Singapore, the Philippines, and Cambodia.
“Pilon aims to bridge the gap and foster healthier relationships between buyers and suppliers which has been a longstanding concern. We are confident that our suite of offerings and solutions would provide a seamless, fuss-free experience for suppliers and buyers to easily access, predict, and manage their funds. With the fresh funds raised, we will be able to unlock the next phase of Pilon’s growth and resolve complex challenges,” commented Eddie Lee, Co-founder and CEO of Pilon.
Buyers frequently demand the longest payment terms possible, while suppliers are forced to accept them under their contractual agreements. Even after agreed-upon payment terms have been established, suppliers continue to experience late payments on occasion, affecting their cash flow which often leads to them missing out on future opportunities. Lenders are then brought into the picture to bridge the cash flow gap; however, lenders frequently conduct time-consuming and labour-intensive checks to verify the authenticity of the deal, adding to the cost and delay for the suppliers, which eventually results in poor experiences for all parties.
With Pilon, suppliers can easily access and track their owed invoices, and choose one or multiple invoices for early financing via their mobile app. They will also be able to choose the date they want the funds in their bank account (if they do not require it immediately), enabled by the built-in spot factoring and dynamic discounting, which will present the discounted offer to the supplier for consideration before accepting it. Above all, buyers and suppliers can now have a better working relationship as buyers are allowed up to 120 days of payment terms while suppliers’ invoices can be paid or financed on demand.
In 2020, Eddie Lee, together with Alex Chua, founded the venture built Pilon in collaboration with Goldbell Financial Services, one of Singapore's largest non-bank financial institutes, with the goal of helping suppliers, corporate buyers, and financial institutions digitalise their business processes, improve invoice financing through technology, and promote financial inclusion.
Paul Santos, Managing Partner at Wavemaker Partners, shared, “SME suppliers in emerging markets often face cash flow challenges due to the rigidity of the payment processes of their buyers. We were impressed with how Pilon’s platform helps suppliers get paid faster and with less friction, while providing buyers longer payment terms. With Pilon, SMEs that were traditionally excluded from the formal financial sector can now access much-needed financing to help them grow.”
Pilon aims to onboard another 1,000 suppliers and collaborate with another five banks or financial institutions across the region.