ABOUT XINABOXXinaBox spotted a unique market opportunity to provide clip-together computing components that let students and others without advanced engineering skills assemble advanced circuit boards for homemade electronics. Its patented “xChip” components were an instant success and immediately attracted orders from global distributors – contracts that the startup was able to fill thanks to invoice financing from Accelerated Payments.
THEIR CHALLENGENot every company is as successful as quickly as XinaBox – pronounced “X in a box” – a pioneering startup whose modular computing components bring the spirit of LEGO to the building of electronics. Aiming at the education market, XinaBox and its patented technology were immediately recognized by global electronics distributors as the perfect product for young engineers learning the basics of their craft. Its circuitboard kits include “xChips,” components with standard connectors; this means users don’t need to understand details like voltage modification or communications protocols. XinaBox was offered a large contract right out of the gate, just as it was setting up its bank accounts, and co-founder Daniel Berman knew that a financing partner was needed to provide liquidity.
“We were able to fund the production run of xChips ourselves, but we wanted a financing partner who could provide finance for between the time we delivered the product, and the time the customer paid,” Daniel said. “That’s what AP did: they were one of the few companies willing to look at the invoice flows of a startup like ourselves. They’ve been providing invoice finance for us continuously ever since.”
- XinaBox keeps AP updated on new clients it wants to work with; AP delivers a response within 48 hours on the level to which it can offer finance
- XinaBox is alerted when its client has accepted its invoice and the invoice is ready to be financed. Up to 80% of the value of the outgoing invoice is immediately available as working capital
- Accelerated Payments provides multicurrency functionality to XinaBox, which serves its global client base in USD; XinaBox is registered in the Republic of Ireland and headquartered in South Africa
SAYING YES TO CUSTOMERS FOR RAPID SCALINGXinaBox says the partnership with AP has been instrumental in letting the company scale up faster. “Working with AP has let us take on much bigger orders, sooner. Without them we would have had to deliver to clients over a much longer period and fund everything through cashflow. Most customers take 60 days to pay, so that’s a major handbrake on growth. AP’s invoice financing has let us grow faster: we’ve doubled headcount and gone from having one global-distributor customer to three in just three years.”
Daniel says AP’s partnership approach, and willingness to hand-hold XinaBox through hiccups of early admin, has been essential. The first large customer sent payments direct to XinaBox’s bank account by mistake, instead of to AP’s.
“We couldn’t get the client to change bank details immediately, so there were a couple invoices before it got sorted out. AP were very understanding and patient with us through it all. That’s why they’re great to work with: they don’t just understand what a new company like ours needs from a finance point of view, they understand the wider business challenges we’re facing, and we face them together.
BENEFITS FOR XINABOX AT A GLANCE
- Gave the startup an immediate source of finance to support fast growth
- AP understands its wider business challenges and takes a partnership approach
- Provides working capital that has supported a doubling of employees and large-customer base
“Working with AP has let us take on much bigger orders, sooner. Without them we would have had to deliver to clients over a much longer period and fund everything through cashflow. Most customers take 60 days to pay, so that’s a major handbrake on growth. AP’s invoice financing has let us grow faster: we’ve doubled headcount and gone from having one global-distributor customer to three in just three years.”