Digital invoice financing platform, Hydr
Hector Macandrew details his innovative invoicing platform, Hydr, and explains how it is changing the perception of invoice financing.
Tell us about your business?
My name is Hector Macandrew and I am the co-founder of Hydr. Hydr is an exclusive digital invoice financing platform. We pay 100% of your bill, less our fixed charges, within 24 hours. This helps businesses optimize their cash flow.
Where did the idea for your business come from?
Financing invoices is not particularly new; it has been around for a long time. It allows businesses to free up money tied up in unpaid invoices, rather than waiting weeks or months for them to be paid. It is a positive and powerful tool for managing cash flow, especially during capital intensive times of a company’s business cycle.
We were founded last August and began operating in May 2021. Our head office is located in Enterprise City, in the heart of Manchester’s tech district, home to a number of brilliant tech companies.
Me and my co-founder Nicola (Weedall) had first hand experience of the transformative impact that cash flow management can have. We knew that with the right technology, and with transparency and simplicity at the heart of our proposition, Hydr could help many small businesses by optimizing their cash flow.
We are convinced that a business’s success should not depend on its ability to wait for payment – and with almost two-thirds of all SMEs experiencing either an increase in late payments or payments completely frozen * due to pandemic, we believe our service is more relevant than ever.
How it works?
At Hydr, we go beyond market standards. We pay 100% of the value of your invoice (rather than 70% or 80%), reducing payment terms from 90 days to 24 hours. Instead of a complex menu of subscription fees, registration fees, and the cost of funding each invoice, we charge a one-time flat, transparent fee for each invoice we fund.
The flat fees we quote are always the fees you pay. It includes credit insurance and does not change, even if your customer is a little late in paying their bill. The integration is completely digital, giving financing decisions in real time. In addition, our platform integrates seamlessly with Xero’s cloud accounting software, making it easy to create and reconcile invoices.
We work with small businesses registered in England Wales who sell products or services to other businesses. We build strong, professional relationships with their clients, allowing business owners to spend their valuable time running their business, rather than worrying about long payment terms or chasing late payments.
What is your background and what does your role in the company consist of?
My career is rather mixed! I left school when I was 16 to study piano and conducting, ending up as Artists’ Manager of the Scottish Opera. I then moved to London to become a headhunter working with private equity and venture capital funds for over 17 years, including founding my own business, Hatton Grange, before it was taken over by Caliber. One in 2015 where I became managing partner. Along the way, I became a pretty active angel investor.
As a small business founder, manager and technology investor, I have direct experience scaling businesses while keeping a very keen eye on cash flow. With Nicola, who has a career in credit and invoice financing, we knew that with the right product, a cloud-based digital experience and transparency at the heart of our proposition, invoice financing was ripe for disruption. . We strongly believe that we can help many small businesses by interacting with them in a current and relevant way.
What sets you apart from your competition?
We are one of the only invoice finance companies to finance 100% of the value of your invoice for a fixed fee at a competitive price. We don’t charge any subscription or referral fees and our price doesn’t change even if your customer is a little late in paying the invoice. The fixed charges we quote are always the charges you pay and also include credit insurance.
Our proprietary digital platform is unique and top notch as evidenced by our listing and endorsement on the Xero Marketplace. Our product is combined with a human and relational service which relies on the expertise of our team.
When you sign up with Hydr, we become an extension of your finance team. Our promise is to invest time and energy in building positive and professional relationships with your clients, which allows you to focus on running and growing your business with certainty around your cash flow.
How was business during the Covid-19 pandemic?
Since we were founded in the middle of the pandemic and spent the first 8 months developing the product, we have not been negatively affected. In fact, it was actually a good time to take a step back, take a step back, and then create a great product.
As the pandemic emerges, we see that many small businesses with great customers will be challenged as they ramp up their business as government support wanes. This is where we can add real value by allowing them to have their bills paid within 24 hours, rather than weeks or months later.
Optimizing your cash flow is essential for any business, whether it’s starting out, going through growth, or managing difficult challenges like the pandemic. We sincerely hope that as businesses emerge from what has been a remarkably difficult time, the service we provide will be of great support to many.
How do you see your market evolving over the next few years?
We think our market is about to grow, but we need to work hard to change the perception of some on bill financing. Many think that this is something that is rather opaque, difficult to ask, difficult to assess, and which amounts to admitting defeat to their customers and competitors. We have built a transparent proposal that is very easy to apply and we are working hard to change those perceptions – invoice financing is a really useful tool for ambitious companies who want to drive growth or large companies who want to optimize their cash flow.
When you take a close look at the cost of our proposal versus financing assets, taking a mortgage, overdraft or other credit card, we are confident that we will be a cheaper option. Not only that, but we save precious time by taking responsibility for the collections.
What’s the hardest thing about running your business?
Winning customers. It is that simple. Once we onboard a client, they love the product and become quite loyal – Nicola and I are spending a lot of energy right now to make it known that invoice financing is a positive thing.
Have you received financial support for your business?
Yes, we are extremely proud to be supported by a small group of seasoned angel investors who have extensive expertise in finance, technology and successful business development.
What were the biggest challenges you encountered?
One of our challenges – but one that we love to tackle – is to change perceptions of bill financing. As the pandemic emerges, we observe that many business owners are extremely cautious about adopting new or different types of financing options. Our market research has shown that some business creators are concerned that their clients will see them differently if they decide to finance their invoices through a third party.
We want to shout from the rooftops that this is not the case! Bill financing does not admit defeat or a sign of weakness. We passionately believe that it is a sign of ambition, confidence and strength. You want to spend your time growing your business, and you need your hard-earned money in the bank as quickly as possible to fuel that growth. Financing invoices well done makes great business sense and can be transformational.
What’s the best decision you’ve made so far?
You are looking for and find an excellent business partner in Nicola. Founding and selling your own business as a sole founder is a great experience, but it was a pretty lonely experience at times.
If you could go back and change one thing, what would it be?
Honestly, not much. There are a lot of little things that we would do differently as we reiterate the product – but so far touch wood there is nothing I would change.
What has been your proudest achievement so far?
Having our product rated on the Xero Marketplace so soon after our launch. They rightly put us to the test and it’s great that our proposal has now been thoroughly tested and approved by a truly awesome software company. We understand that building trust is an essential part of our journey, and it was a huge step in that direction.
What are your hopes for your business in the next five years?
Am I allowed to say world domination ?! At the very least, we will have many clients whose working lives have been transformed by the robustness and predictability of their cash flow, and many leaders within those companies whose time will have been saved because a partner of trust manages their customers and ensures that invoices are paid on time.
We will continue to scale our business and integrate with more cloud accounting software vendors so that non-Xero customers can take advantage of our service. We have a sizable team to run and a few more products in the works – watch this space!