Based in Madrid and Amsterdam, Twinco Capital is on a mission to give the fashion and retail industry a complete supply chain solution. The female-led fintech has just raised €11 million to fuel the creation of more competitive and socially responsible supply chains, empowering small businesses to thrive.
It’s reported that there is a global trade finance gap – estimated to sit at $1.7 trillion – and it’s mostly impacting small and medium-sized companies in emerging countries. It hinders their ability to access business opportunities, grow and achieve more success. With a lack of finance for these companies, the retail and fashion industries lack a competitive, accessible and socially responsible supply chain – something which fintech startup Twinco wants to resolve.
Founded by Sandra Nolasco and Carmen Marín, Twinco combines tech with access to data to assess performance risk in order to fund both small and large suppliers around the world. The startup, based in Madrid and Amsterdam, has just raised €11 million ($12 million) to scale.
- €11 million ($12 million) closed in equity and debt round
- The investment was led by Quona Capital, and included participation from Working Capital, as well as existing investors Mundi Ventures and Finch Capital. Zubi Capital provided the venture debt portion.
- The company is also seeking to raise a $100 million debt facility this quarter
CEO Sandra Nolasco: “If we are to have competitive and socially responsible supply chains on a global scale, suppliers need access to affordable financing from the very beginning of production, starting with the purchase order. Extraordinary events, such as those experienced these past years, have revealed the fragility of supply chains, which are historically unable to adapt to the complexity of global production networks. At Twinco, we propose a radical change in how to use finance as a tool to proactively transform global supply chains, to foster the participation of SMEs, improve efficiency and ensure responsible sourcing practices.”
Launched in 2019, Twinco works with large corporations—mostly in the retail and apparel sectors—and offers funding to their suppliers worldwide, advancing up to 60% of the purchase order value upfront and paying the remainder upon delivery. The process is designed to be a fully transparent, no-hassle experience that provides the suppliers with funding for its purchase orders within 48 hours.
Underpinning the financing programs, Twinco continuously collects data on the commercial, financial and ESG performance of the thousands of manufacturers involved in these supply chains. As a result, Twinco also offers unique business intelligence that can enable SMEs to produce products competitively and responsibly.
The fintech leverages a unique risk model, which the team believes is the trick behind solving the supply chain finance problem. Its model complements the traditional view of financial risk with commercial performance and ESG data. In other words, it uses machine learning to evaluate the quality and strength of the commercial relationships between buyers and their suppliers.
Paarul Dudeja, Managing Director at Working Capital Innovation Fund: “Suppliers that value human capital and treat their workers well are better businesses, presenting a lower risk to their banks and lenders. We’re thrilled to invest in Twinco because they will assess ‘ESG’ risk and incorporate it into their investment decision-making — we think this will open up new areas of impact and commercial success for them.”
Since its 2019 launch, Twinco has onboarded more than 100 suppliers, located in 12 different countries including Bangladesh, China, Pakistan, South Korea, Turkey, Thailand, Vietnam, Indonesia and Spain. Today, the fintech has programs in place which serve engaged European and LatAm retailers who buy more than $10 billion per year of manufactured products, mostly from SMEs in emerging markets. With Twinco, SMEs all over the world can access affordable liquidity, when they most need it—when they receive an order and need to start production.
COO Carmen Marin: “Twinco’s ambitious mission can only be achieved by bringing together all the relevant parties: Buyers, Suppliers and Investors. With our new funding, we will be extending our geographic scope and data capabilities. We are also very excited to launch the very first sustainable-native supply chain finance program—the Twinco ESG Tilt, where business intelligence is directly linked to beneficial purchasing and funding conditions.”
Monica Brand Engel, co-founder and Managing Partner at Quona: “Twinco is focused on a significant pain point in the massive and underpenetrated market that is supply chain finance. At Quona, we’ve been incredibly impressed by the strength of this founding team and its business model, and we’re excited to be part of their journey to provide much-needed and affordable supply chain finance to help responsibly fuel the economic gains of emerging market suppliers.”