With more than 200 developers signed up to develop business apps on its platform, Danish electronic business start-up Tradeshift is looking more like Facebook for business than the simple electronic invoicing service that launched last year.
Companies like Danske Bank and Dun & Bradstreet, as well as a host of smaller independent software developers, are now adding features ranging from business credit rating and currency hedging to invoice styling features and region-specific tax and accounting packages. This will allow Tradeshift's customers to adopt new features piece by piece.
L-R: Tradeshift founders Mikkel Hippe Brun, Christian Lanng and Gert Syvlest (Credit: Tradeshift)
Today, one of Tradeshift's customers who buys cell phones in China and sells them in Africa can manage his purchase orders and invoices, and transfer money internationally through PayPal's Business Payments service for AU$1 per payment, all through Tradeshift’s web site. In a few months he will be able to see his vendors’ inventories, check the creditworthiness of his far-off customers and factor his receivables as new apps become available on the Tradeshift Apps Platform.
Christian Lanng, Tradeshift's CEO and co-founder, pointed out that Tradeshift's design will make business apps spread virally, unlike the apps developed for Google's Apps Marketplace. "If a company finds a good logistics application it will ask its business partners to adopt it as well," said Lanng.
Large Tradeshift customers such as the UK's National Health Service and Fortune 200 shipping and logistics companies counted their business partners in the tens of thousands, so Lanng expects more than a few iPhone and Android developers to build new apps for the Tradeshift Platform.
With only 50 employees to cover the 170 countries Tradeshift now does business in, third-party developers will be critically important to both the growth of the company and its revenue model.
Deadline Media, a web development consultancy in Adelaide, has been integrating Tradeshift's web-based invoicing services for South Australia's largest domestic home builder. "We love the Tradeshift concept," explained Sean Heylen, Design Media's managing director, "and our clients need it to support GST and invoice factoring".
Lanng explained that a customisable tax feature has just been released. Invoice factoring is on the way, but he won't talk about it yet.
Designing Tradeshift in the form of a social network has been vital to both the firm's growth and to protecting member companies against fraud.
"We do a lot of pattern matching," said Lanng. "If a company sends out 1000 invoices or connection requests, and few reply, that's a sign that they may not be who they say they are, and we can red flag any invoices from that company for other members of the network." On the other hand, a small translation business may send out several hundred electronic invoices via Tradeshift each month, and at least some of these will result in new companies joining Tradeshift's network.
When it launched in May of 2010 Tradeshift was recognized as a Web 2.0 alternative to Electronic Data Interchange that would enable small businesses to adopt electronic invoicing. But where EDI took 40 years to serve 160,000 businesses worldwide, Tradeshift’s network will probably count 160,000 members by the end of 2011.
The company has been funded by angel investors, including early Skype financier Morten Lund. It is just now raising a larger round of venture financing.