The Connector.
The Connector.
The Connector Podcast - DFS Digital Finance Summit - Funding Growth With Real-Time Inventory Value
We sit down with Xavier Corman to unpack how Finrack turns inventory into financeable collateral using real-time pricing and a sale-and-buyback model. The conversation spans EU cross-border advantages, practical AI, and why better inventory KPIs drive both growth and sustainability.
• founding story and links to FinTech Belgium and EDFA
• the SME financing gap when inventory is the asset
• how real-time pricing enables flexible funding
• case study of an organic bakery scaling seasonal output
• regulation via sale and buyback rather than loans
• cross-border VAT mechanics inside the EU
• integrations with WMS and ERP for daily data
• operational KPIs that reduce waste and warehouse size
• practical use of AI for data cleaning and analysis
• broker-led go-to-market and market expansion
• client testimonials and rising demand across Europe
• where to enquire and how to qualify
If you want to know more, go to finrack.com, fill in the three fields, and we will contact you back.
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Koen Vanderhoydonk
koen.vanderhoydonk@jointheconnector.com
#FinTech #RegTech #Scaleup #WealthTech
Welcome to the Connector Podcast, an ongoing conversation connecting fintech, funded and regulated globally. Join CEO and founder, Owen van der Voydon, and you learn more about the latest available trends and solutions in the market.
SPEAKER_02:Welcome to another podcast live from DFS in Brussels. And I've got with me Xavier. And Xavier has two roles in this podcast because he's both the CEO and founder of FinRec, but he's also very much connected or was very much connected with FinTech Belgium. So Xavier, can you introduce yourself to the audience, please?
SPEAKER_00:Yes, I'm Xavier Cormon, uh founder of um FinRec today. Uh previously I found also another FinTech called Etebex, and I was uh honored to be one of the co-founders of FinTech Belgium, the famous association, and also the EDFA for stands for European Digital Finance Association, which is the association of uh the national association. So I'm quite involved in the fintech industry in Belgium and also in Europe.
SPEAKER_02:That's great. But today we're gonna deep dive a little bit in Finrec, which is your latest company that you founded. So can you please explain us a little bit what you do and which problem do you solve?
SPEAKER_00:Absolutely. So uh a lot of um small and medium companies uh face a lack of financing. Uh, some of them, and a lot of them actually, they have inventories. And they would like to use their inventories as collateral uh to be funded, uh preferably by banks because they are very used to work with banks, but then comes a problem. Uh banks they don't like inventories as collateral because they are not able to give a real value to the inventories. And so if they take only the balance sheet value, uh it's useless because it's not representative of the reality, and so they don't have any means to uh to price those inventories, and so they don't use or very little use inventories as collateral. At Finraq, we solve the problem uh not by financing uh without knowledge, but by analyzing and developing a tool, actually, um an algorithm that is able to price any inventory on real time. And thanks to that value, then we can fund. And today we start by funding ourselves just to prove that we believe in our uh in our software, in our algorithm. And then later, and we have already some banks knocking on the door saying, Hey hi guys, how do you do that? Can we use your tool? Today it's a little bit early because we want to prove really that our algorithm is very strong and and uh and efficient.
SPEAKER_02:Xavier, can you give us like a real live example how that translates into concrete examples?
SPEAKER_00:Um Yeah, sure. Uh I I can take the the example of our very first client, and we are proud to have this client even before incorporating the the company. So this client is still live, uh so the the guy continues to uh to use uh feedback is an industrial bakery. So uh yes, they have sugar, floor, they have uh uh honey, everything to make uh cakes, to to produce cakes. Uh everything is organic, so it's uh uh a very good company based in the north of France. And um the the the the entrepreneur was struggling to increase their activity because he has to buy a lot of inventories to produce, and then he has uh a stock of produced goods, and then it's cheap, especially during the end of the year, because he produced cakes for uh Christmas and end of the year. And so we we we we we started funding him uh two years ago, and uh the the company now is growing like 10-15 percent a year. Uh when you are in a real economy producing goods, 10-15 percent is not that bad. Uh it's not a gas company, it's a real one. Uh I mean producing real stuff. And so um the entrepreneur is very very happy because he could keep also um the existing uh credits he had with the banks, so we are not there to replace, we are here to to help the company to increase their financing.
SPEAKER_02:I think it's a good example, especially because of the period we're in. We're in Christmas, so everything is about cakes. Um, I think you guys are actually hoovering between traditional banking and and real economy, but is it not difficult then also to hover about regulation? So, how does regulation apply to you and how do you deal with that?
SPEAKER_00:We are lucky because the way we do financing is through a scheme of uh sales and buyback. So, actually, the real activity of the company is to buy inventories and to sales back the inventories to the same company. So buying and selling goods so far are not very regulated, not on the financial aspect. Then obviously, we have the same regulation as every company, but um by that scheme, uh we skip a lot of uh problems or a lot of hurdles on uh on the regulation side.
SPEAKER_02:Well, you mentioned an example here of the north of France, you're based in in Belgium, in Brussels. Um is there not a lot of complexity when you actually have cross-border sales? Or how do you deal with that?
SPEAKER_00:Actually, it's uh it's an added value uh because of the the VAT regulation. Um, what we do, it's everything with uh I don't know to say uh to say it, but uh you know we the the the company doesn't have to pay the VAT when we we invoice them because it's cross-border within European Union.
SPEAKER_02:And would you consider also taking clients across or outside the European Union? And how would that work?
SPEAKER_00:Uh so far, not maybe with the exception of the UK, because they are not in the European Union anymore. Um today we have clients in in Belgium, in France, and we consider to have some in Italy and Germany soon, uh, because we have uh uh good uh contacts there. Uh, probably UK is a possibility.
SPEAKER_02:Well, you earlier you mentioned that you use an algorithm to do valuation, to uh sort of value the collateral that you have in a real-time fashion. Um, how does that compare to more traditional finance where you also have collateral value? Do you use haircuts? Do you use like tooling and principles from the traditional finance?
SPEAKER_00:No, actually, uh, to work with us, a company has to uh to have uh all the inventories totally uh uh digital, and then we connect ourselves to their warehouse management system or their ERP, whatever they have. Uh we are very pragmatic, so we build uh something made to measure, uh, to have the information on a regular basis. The minimum it's once a day, best is real uh real time, uh, but sometimes it's only once a day. Um, and then we uh manage the the data we receive uh uh to um yeah to adapt the data to what we need.
SPEAKER_02:Understood. Well, Xavier, as you mentioned in the beginning, you you're very active in in the the realms of fintech, and I know fintech for good is one of the things that's close to your heart as well. And what you do with FinRec does a lot of relationship with that. Do we would you agree?
SPEAKER_00:Yes, uh, because um something strange when we start uh working with a company is that after a few days or weeks, we have more information or more analysis because they have the information, but we have more analysis on the inventories of our clients than they have. And so they come to us saying, Hey guys, at Finraq, uh you have KPIs that we don't have today. Can you share those KPIs with us? And then what we see, um, and probably it will be it will come in the future, is that with our KPIs they can improve the way they organize their inventories, and then this has an impact on the environment because they can reduce the size of the inventories, but also the size of the warehouse. So you can imagine that every um warehouse is reduced by 10 or 15 percent. It looks a detailed, but it's super huge, and so it's also to reduce the waste. Um there are a lot of old stuff in the inventories, so it can be uh used more frequently. So everything has a positive impact on environment and also on economics.
SPEAKER_02:Yeah, and on this side you literally talk about real economy. Um well, maybe a little bit on a on the the technology side, it's almost impossible not to talk about AI, and especially when you mentioned advanced algorithms. Is there a is there a source of AI as well?
SPEAKER_00:Well, AI, everybody use AI. When you are looking for a a cooking receipt, uh you go on chat GPT and and you ask chat GPT. So obviously we use AI. Um does it does it mean that we are AI company? I would not say that. I would say uh that we use uh modern tools, whatever we have, and uh yes, we use AI tools to make analysis of the the the potential clients we have and also the clients we have, but we are not a native AI technology company. I I prefer to to say the true and not to oversell what we do.
SPEAKER_02:Because in this case it's it's all about the outcome, right? It doesn't matter which tool you use as long as the outcome is there.
SPEAKER_00:Absolutely, and and the what we are looking for is also to be the most efficient as possible. So uh we receive a lot of data from our clients, but really a lot. So AI is useful to sort those data, to reorganize those data, to clean those data, and then also to start the first analysis. So we we reduce the workload, the human workload on the analysis and to be more and more automatic. Uh, obviously, after uh months or years of experience, it will increase and we can also adapt uh existing tools, existing AI tools to help us. But we are looking for efficiency and we are not looking to use uh fancy tools.
SPEAKER_02:Yeah, no, understood. Now, Xavier, um, I think last year, no, two years ago, we were in a car together uh driving to Aradia on-chain festival, and you were telling me about Finrec. And now, fast forward, the company is live and you already have uh customers. And how does your future look like of FinRec?
SPEAKER_00:I really don't know, but when I see um the reaction of the uh of the of the industry, uh so I mean the financing industry for SMEs, especially in France, which is a very big market for us, um they are very enthusiastic on the on what we do, on the way we do. Um and honestly, Kun, we we have requests coming from Poland, we have requests coming from Germany, and we are very small, we are we are very young. So, yes, we are very enthusiastic. Uh, I'm very happy to see the the good reaction. Um a small example. Normally, when you when you are in um alternative financing and you ask uh companies if they want to talk about that, they're reluctant. And with us, uh they say, Yes, you can come, you can take pictures, I'm okay to make videos. So we have a YouTube channel with testimonials from clients, which means that they are very happy uh about the service, but they're also proud to use FinRack. So I'm pretty sure that the future is bright, and as every time with a company, um, it's challenging, uh, it's an adventure. So uh today I'm very happy, maybe tomorrow it'll be less uh because uh I have uh problems to solve, and on Monday I will be happy again with a new contract.
SPEAKER_02:I guess you're describing the roller coaster of being an entrepreneur, right? Absolutely. Uh no, thank you very much, Xavier. That was a really nice insight in your company. I guess I have one last question before we close this podcast because you say people are coming to you. So, what has been like the the strategy that you use in terms of marketing? Because you seem to have cracked a nut in terms of scaling fast.
SPEAKER_00:So the way we do the way we started uh is through uh a network of uh brokers, and it's um it's it's a job that exists in France and much less in Belgium. So in France, there are brokers in uh company financing, and so they they know us uh since years on a person on a personal way. Uh and so when we we we we call them saying we have a new product and it's complementary to everything you have, obviously they are happy because it's uh it's it's a wildcard they have in their game. Um so that's one way to uh to start, and then uh we start marketing and uh um working on our image um to uh to increase our visibility and uh and then we do a hard prospection. Uh there is no my miracle uh when you need clients, you need to get out of your office and to knock doors, some stay close and then some say uh some open.
SPEAKER_02:I think that's a very wise uh sort of advice for everyone. I want to ask you if anyone is interested to know more about you, about your company, how do they reach you?
SPEAKER_00:So the the the easiest way is to go on our on our website, uh finrack, so f-inrackey.com, finrack.com, and then there is a small form, it's only three fields, think how much you you are looking for, what's the the value of your inventories, and uh if your inventory is digital, you click next, you put your email address, and then we contact you back.
SPEAKER_02:Thank you very much. Well, Xavier, thank you very much for your contribution in this podcast. Thank you also to the audience, and uh, please stay tuned because there's still a couple of insights coming from TFS uh this year. Thank you so much.
SPEAKER_00:Thank you, good. Bye.
SPEAKER_01:Thanks for listening to another episode of the Connector Podcast. Head over to www. Join theconnector.com.org.