This week our featured startup is Vesl, which provides innovative trade finance solutions for traditional and online commerce. Vesl facilitates access to cheaper invoice financing and opens up financing to previously ineligible companies by securing invoices with trade credit insurance. Vesl brings together borrowers, insurers, and financiers through a platform where borrowers are enabled access to bite-size insurance and financing by the best and largest providers worldwide. As its name suggests, Vesl is a vessel to access trade finance—it is neither an insurer nor a lending company, rather a trade finance platform granting access to financing and trade credit insurance for commerce around the world. We spoke with Maureen Nova Ledesma, Co-Founder and CEO of Vesl, as well as other members of the Vesl team: Jessica Manipon, Co-Founder and Guaya Melgar, Co-Founder, to learn more about how they are impacting the insurance market.
On what segments and problems is Vesl working in the insurance market? What makes you different from other competitors in the market?
So here’s what everyone needs to understand first: Trade credit insurance is more than just protection against a defaulting customer. Since it reduces a buyer’s credit risk, financial institutions are more willing to lend and even lower borrowing rates to insured transactions. Many businesses could benefit from trade credit insurance.
But here’s the problem: It is not popular because of the way it is being distributed right now, where premiums are paid on the entire projected turnover for the year at the beginning of a period, either yearly or quarterly. Insurers usually ask for a minimum premium paid which could cost at least USD $10,000. Our model changes the way businesses pay for premium where they only pay on demand, when they have an insurable transaction. This means they can spread the cost over a period.
How did the Vesl team meet?
We all knew each other back when we were working for a forex trading company in Manila. We were the early employees of that company where we all dabbled in sales trading, marketing, business development, and research. Our working dynamics jived well together. And we’re just lucky enough to scout a talent like Rona along the way.
Can you tell us about why you have chosen to solve the trade credit gap?
The trade credit gap is reported by the Asian Development bank year to year. The 2015 report tallied US$1.4Tn while 2016 tallied US$1.6Tn worldwide. Small and medium sized enterprise proposals for trade finance are rejected 52% of the time. We believe we can help economies grow by taking on this problem. Per ADB, a 25% improvement in financing can already increase production by 30%, employment by 20% and new business by 19%.
We view this as a big challenge and at the same time a big opportunity if we can leverage on technology. There are existing FinTech solutions but we believe that there’s still more that can be done to this trade credit gap, and the solution may come from InsurTech.
What were your expectations for an accelerator when you joined, and what are your thoughts today?
You know how Power Puff Girls were created – mixture of Sugar, Spice and everything nice… and then chemical X was added? Startupbootcamp (SBC) is like that. SBC provides all the support a startup needs, except chemical X because chemical X ought to come from the founders themselves to make things happen and make the most of the program. In other words, the program exceeded expectations but nothing comes easy.
What have you achieved since joining the program?
Since joining the program, we have received guidance from the best mentors we could ever ask for. Compliance-wise, we managed to get in touch with the regulators at MAS who are quite helpful. Furthermore, doors for partnerships have opened, including one for a potential worldwide distribution channel (and we’re so excited to see how it will all unfold). We also managed to gain the support of Marsh as our placement broker, arranging a policy with an S&P AA- rated insurer.
Your team is comprised of all women—what have you found to be the benefits of being an all-female team?
Jessica: For us, one’s gender has nothing to do at all with running a startup. Just like all other startups (regardless of the profile of their team), we get what we reap. We work hard, and we don’t think about anything else. We find ourselves going through the same challenges and difficulties as other startups, too.
Mau: I second Jessica’s point. However, since there’s not a lot of all-female founding teams, we do get some pleasant reactions and compliments. We hope we can set an example and one day make this part of the norm.
Do you think you have had a different experience than other start-ups because you’re all women?
Guaya: I do think there’s a bit of a difference being in an all-female team. There’s a bit more emotion. Could be difficult sometimes, but it also means there’s more passion, more stubbornness, more drive. (FYI I feel it very acutely, guys).
Maureen: *Agrees and nods* Well there you go—the whole truth! I wonder what it’s like in other startups…
If you would like a chance to speak to Vesl and listen to their 5 minute pitch, be sure to apply for a ticket to our Demo Day Tour here!