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Technology / AI and automation

Alibaba to help finance UK businesses

Alibaba Group Holding Ltd is opening a way for UK firms to buy from Chinese suppliers by signing two UK startups to provide financing for SMEs.

UK financing start ups iwoca Ltd and ezbob are a first for the Chinese company in Europe, and are intended to provide short-term working capital to businesses that otherwise would have trouble securing funds from banks.

British firms looking to source cheap components or goods from Chinese suppliers apply for credit online; the startups review their business track records, tax returns and other data; then provide a swift decision.

"We want to make financing as easy as possible for the millions of British companies that do business through Alibaba.com," said Wei Duan, Alibaba.com’s European marketing and business development director.

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ezbob and iwoca would provide the financing themselves. Currently they lend to Amazon.com and eBay merchants.
Ezbob is a 4-year-old company backed by the British government’s Angel CoFund and its loans are guaranteed by the European Union.

Iwoca, or "instant working capital," has secured financing from investors including Global Founders Capital and Redline Capital.
Iwoca Chief Executive Officer Christoph Rieche said in a statement he expects to finance some 100 million pounds of deals over the next 12 months. Funds are channeled directly to Chinese suppliers.

Both will be providing micro-loans of 50,000 pounds ($75,315) and up to qualified firms, at anticipated interest rates of 0.75 percent to 2 percent monthly.

Britain is one of Alibaba’s major markets, primarily for business-to-business goods sourcing on Alibaba.com. The Chinese company derives the lion’s share of its revenue from retail platforms Taobao and Tmall, but it got its start supporting small businesses with Alibaba.com, which Jack Ma co-founded out of his Hangzhou apartment in 1999.


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