Hokodo awarded €2m by Horizon 2020
Hokodo, the UK fintech start-up, has been awarded €2 million ($2.23 million) by Horizon 2020, the funding programme for research and innovation run by the European Commission.
Grants are awarded to market-creating innovations that demonstrate high growth prospects and are highly competitive – only around 7.5% of the SMEs who enter are successful.
Awarded to Hokodo’s French office, the funding will enable the launch of its API-based invoice insurance offering in Europe, to protect potentially millions of SMEs from unpaid invoices – one of the largest causes of insolvency.
Hokodo previously raised €2.1m of seed funding in a round led by Anthemis.
The fintech was co-founded by Richard Thornton, former chief revenue officer and COO at Aspen Insurance, along with Louis Carbonnier and Sami Ben Hatit, former CEO and CTO of Euler Hermes’ digital practice.
“Receiving the grant from Horizon 2020 is a huge boost for the business. Not only does it enable us to offer invoice insurance across Europe sooner than we would have otherwise, but we estimate we’ll be able to protect over €200 million worth of B2B trade over the next two years. It is also a huge vote of confidence for the importance of what we’re trying to do, and the role we have to play in supporting SME trade and success,” says Carbonnier.
Hokodo is making invoice insurance accessible for SMEs by applying data science and machine learning to enable SMEs to protect single invoices and using APIs. It is distributing its products via the platforms that SMEs use on a daily basis, such as accounting, invoicing or sales tools.
This means that customers can take out invoice insurance at the point of need, in real time, when they are accepting a purchase order or raising an invoice, rather than spending time sourcing cover elsewhere. And by bypassing the broker channel, Hokodo is able to dramatically reduce the cost of cover.
Hokodo launched its technology in the UK in October 2018 and has already established a range of partnerships, including one with Centrifuge, a trade finance platform and CountingUp, the challenger bank. The company has also developed its own credit scoring algorithm, HokoScore, allowing businesses to check the credit ratings of their clients and suppliers, and make informed decisions about credit terms and the need for invoice protection.
The Horizon 2020 grant will enable Hokodo to launch invoice protection and HokoScore in France and Germany within the next 12 months, as well as helping it to develop two new trade credit products for the SME market, which are due to go live by the end of 2019.