CML Group yesterday announced that, for an intial payment of $2.25m, it has entered into a binding agreement to purchase 100% of the shares in Skippr Invoice Finance.
The group already provides debtor, equipment and trade finance to SMEs through its Cashflow Finance and Classic Funding Group brands. Following completion of the acquisition, the online Skippr platform will be combined with its current offerings to launch an expanded product.
If “a substantial multiple of current funding volumes” are achieved over the next two and a half years, a maximum transaction price of $6.5m is payable.
Originally founded in 2016, Skippr is a proprietary online platform that provides invoice financing solutions to SME clients. The platform was redesigned just over a year ago following an ownership change in April 2019, to deliver an end to end invoice finance solution.
By directly accessing cloud accounting technology, Skippr seamlessly integrates with a client’s receivables book enabling efficient approval for funding, automated payment reconciliation and real-time oversight of account transactions.
Since the beta launch of the new version rolled out in October 2019, Skippr has onboarded 25 clients and boasts a current loan book of $1.2m without a dedicated salesperson and with total marketing spend of less than $50,000.
Skippr’s implied cost of client acquisition of $2,000 and ability to profitably onboard customers with smaller loan books is of particular note to CML Group given that its historical cost of acquisition has sat around $20,000. The Skippr platform will enable CML to profitably access smaller clients who will then become larger clients, as well as improve client retention through a more automated user experience for both existing and new customers.
“The acquisition of Skippr brings forward our technology development by two years,” said Daniel Riley, CEO of CML.
“We see this as extremely important as Australian SMEs begin to source alternative working capital facilities such as invoice financing as they start to come out of COVID-19.
“We have been pleased with the recent rebound in performance in June which has continued in July and our ability to offer more automation which will enable us to service smaller clients while providing our existing and future clients with a better customer experience will be important to maintain the growth we expect over this and future years.”