9 Spokes International Ltd (ASX:9SP) is confident small and medium-sized enterprises (SMEs) will play key roles in rebooting economies post COVID-19 and is well-placed to facilitate this growth with its data platform.
The company offers modern businesses a management app that brings together meaningful data across a business, its apps and its banks to deliver meaningful, personalised and sharable insights.
Co-founder and chief executive officer Adrian Grant said: “Our business is all about SMEs and helping SMEs to be better at what they do and how they run their businesses day-to-day.
“If you have a general ledger, payroll, or staff rostering app, you actually have to go into each of those apps to perform a task. There’s never been a tool that acts as a connector between all of a business’ apps to bring their data together as valuable insights.
“We are that connector.
“Our platform provides an overview of your business’ performance across areas such as finance, HR and marketing.
“With that range of oversight of your business’ performance, you can be given insights or alerts that you can use to take action and drive better outcomes because you have all your data on hand.”
Economic impact of SMEs
Grant said that over the last three months, the world had woken up to the importance of SMEs in the economy.
He said: “They’re not big businesses in many cases, but they are the group that employs a large section of society.
“The world’s woken up to the fact that, if we don’t protect, nurture and help these businesses, then the economy will suffer.
“The impact will be hardest felt in employment, with a significant ‘flow-on’ impact to society.”
Typically, these smaller businesses don’t always have access to capital to build or implement support systems for their operations and often lack the resources that larger corporations have – for example, a dedicated accounting team.
Grant said: “In one sense, our task is to give the smaller companies the same benefit that the large corporates have, but at a fraction of the cost.
“In another sense, it’s driven by an understanding of the relationship between access to capital and business success and just how tightly coupled they are.
“So, the reason we went to banks as a channel to market was because: a) they have millions of customers, and b) they are empathetic to that point between the success of their business customers and access to capital.”
Helping banks provide targeted support
Not only does the 9 Spokes platform benefit businesses, but it also benefits the banks.
It provides banks permissioned access to business data, which improves visibility of their business customers and helps banks to reduce risk.
Grant said: “Businesses gain a value-added business hub, while their banks get the insights needed to offer products and services better tailored to their customers’ needs.
“For a bank to give a loan to a small business, it needs to see that small business’ performance and know that it’s trading successfully.
9 Spokes co-founder and chief executive officer Adrian Grant.
“Our platform gives that peace of mind.”
Banks are putting their capital at risk and trusting businesses to provide a true picture of their business performance, and9 Spokes opens up that dialogue, giving banks a view of that data.
Grant said: “We know that the more comfort a bank can take in a business’ success, the more money they’ll be willing to lend – thus supporting business customers to grow their businesses and thrive.”
COVID-19 has shown banks where there are gaps in data on their customers.
Grant said: “There have been such dramatic shifts in revenue and employment for the entire SME sector.
“Banks have realised that they lack sufficient data to track – in real or near real-time – their business customers’ performance so that they can lend money with confidence.
“Now they’re realising they have a mighty big gap in terms of the ability to manage their credit risk with their clients – that’s where we come in.”
The company is extremely confident that its hypothesis (that data drives performance) is correct, especially in a post-COVID economy.
Grant said: “Everyone understands the importance of data to make sound business decisions, that it’s not just a luxury – everyone needs to have it.
“Data will help small businesses to drive better outcomes.
“It’s going to help them gain access to capital; it’ll help them grow, survive, and stabilise themselves so they can thrive.
“And for the banks, it will give them more confidence to respond to the current economic climate by extending their digital service offering, and deepening relationships with their small business customers.”
Building global partnerships
The next step for the company is to be able to scale its platform and sales strategy via strong partnerships.
Grant said: “Right across the business we’ve been working to productise our platform such that we can build to scale.
“With our product ready, the process that we’re going through now is preparing to sell at scale.
“We’re very confident of our ability to build, deploy, and manage a platform that’s considerably larger, and now we are getting very close to being in a position to sell at scale through partnerships.”
Grant said: “Microsoft supports us selling to banks.
“They have a global footprint and very senior relationships in the banking sector.
“And every time we sell something to a bank, Microsoft benefits because we can sell Microsoft as the host.
“We’ve laid the foundations for scaling the platform; now we need to demonstrate it through our partnerships, a challenge we are well-prepared for.”