Fulfin: “This challenging period has been extremely positive for our company”

Since 2018, the Munich-based startup Fulfin has been offering financing solutions for online SMEs, helping online shops, for example, to be able to purchase new goods. In this update interview, Co-Founder Nathan Evans explains what the crises of the last few years have done to the startup and how it will further develop.

Munich Startup: When we last spoke, we were in the middle of the covid crisis and the increase in online shopping back then had a positive influence on the business of Fulfin. What has changed since then?

Nathan Evans, Fulfin: After Covid came the inflation surge and the rising interest rates which accompanied it. We all know the effect this has had on VC funding for startups and fintech funding has retreated more than most. We were not really shocked by any of this and were very certain our business model would be resilient through the cycle.

Remember that old song “When the going gets tough, the tough get going”? Well that certainly applies to Fulfin during this challenging period, which has been extremely positive for our company. For one banks have withdrawn even further from SME lending, which combined with the reduction in VC funding means SMEs more than ever appreciate the possibilities of neolending. Another significant effect is that many other less able lenders have experienced significant defaults whereas our AI-enabled risk engine has delivered industry leading performance even throughout these challenging times. This has made it much easier for us to raise equity and debt at very competitive terms.

Munich Startup: What obstacles did you encounter along the way?

Nathan Evans: Happily all of our challenges are caused by our growth and our opportunity. We are still a lean organization and finding great people to grow the team is never easy, but it is a luxury problem to be growing and to need to build the team.

Fulfin increasingly utilizes AI

Munich Startup: How did your solution evolve?

Nathan Evans: The extent to which we leverage AI and data science within our credit scoring has increased significantly and the role played by the “human in the loop” underwriter becomes more that of validation than of decision making. This means credit scoring has become even quicker and the user experience even better than ever before. We are also progressing with our strategy to leverage our financial insights from having evaluated several thousand companies and millions of financial transactions to provide insights within our product to help our clients make more intelligent financial decisions.

Munich Startup: How do things look for you financially?

Nathan Evans: We are currently well capitalized with runway into next year. Both improved terms on our debt financing and the confirmation of our research funding have extended our effective runway by several months. We will raise another financing round soon to enable us to grow even more strongly and we already have received strong interest from investors.

“If you expect the road to be straight and smooth you are a fool”

Munich Startups: What lessons have you learned as founders so far?

Nathan Evans: “Everybody has a plan until they get punched in the face” is a famous Mike Tyson quote. This is a metaphor for founder life. Having a vision and a plan on how to get there is vital, but if you expect the road to be straight and smooth you are a fool. Startups face all the challenges of more established companies and then a whole bunch more. Our company, product and even to some extent our vision are all different to what they were a few years ago, which I think is a very positive thing in the light of the changing circumstances. What do not change are our values and believes and how we go about achieving our goals.

Munich Startup: What role has the Munich ecosystem played on your path?

Nathan Evans: We have always been able to recruit excellent talent in Munich thanks to our strong connections within the startup ecosystem and to both TUM and LMU. Many fintechs are based in Berlin, but we have always felt that we could build our company equally well in Munich as we could in the capital. We have grown up here starting on the couch in the Werk1 café to our current home in MTZ.

Fulfin has some major announcements to make

Munich Startup: What milestones are you working towards next?

Nathan Evans: We will shortly officially announce an exciting tech and origination partnership with a German Bank that is going to positively affect our client acquisition and potentially enable us to monetize the risk-technology that we have built. Major product milestones are also in the pipeline that will make our platform even more valuable for our digital SME clients. We believe the future of lending is with fintechs and are excited to see how our business will grow over the next few years.