Deep Tier, a fintech platform that provides support to the entire supply chain, from supply chain leaders to sub-suppliers, both local and foreign, has raised a co-investment round co-led by the B2B innovation platform GELLIFY and the Azimut Digitech Fund by Azimut Libera Impresa SGR, which will bolster the software platform’s strategic and operational development.
The idea behind Deep Tier was to create a new model of an ethical, accessible, and scalable fintech platform that allows all players in the supply chain to access favorable terms and several forms of funding and down payments quickly regardless of their specific business size, economic, and financial characteristics, but on the basis of their industrial reliability.
Through this investment transaction, Deep Tier expands the services offered by existing market players with different solutions available in a unique platform, such as dynamic discounting, factoring, reverse factoring, and invoice trading, which support companies at each step in the advance payment process along the entire supply chain.
Deep Tier was started as a result of GELLIFY’s venture building capabilities, along with the support of the industrial partner Comer Industries, a global player in the design and production of advanced engineering systems and mechatronic solutions, and IUNGO, a supply chain collaboration solution that allows corporations to digitize the procurement process and optimize logistics management. With over 100,000 companies currently using its solution, IUNGO is also a market leader in Italy and is already part of GELLIFY’s investment portfolio.
The new company was created after a long research period into the opportunities and current inefficiencies of the financing system and supply relationships management.
In fact, the latest data from Supply Chain Finance Observatory at the Politecnico di Milano School of Management reveals that more than 70% of the market for supply chain finance solutions – which in Italy has an equivalent value of about 360 billion euros – does not have access to advance payment sources, except through particularly unfavorable conditions and very high prices determined exclusively on dimensional and economic data, and rarely based on one’s actual ability to provide quality products within the timeframes contracted by the supply chain leaders.
According to this same research from the Observatory on Supply Chain Financing at the Politecnico di Milano, Italy is worth 3% of the potential global supply chain finance market at the international level, which at the end of 2018 amounted to 16,500 billion euros. With about 7,000 billion euros of trade receivables/credits, Asia represents the largest potential market for supply chain finance, driven by China (3,000 billion) and Japan (1,200 billion). They are followed by the Americas, with around 5,000 billion, of which over 60% belongs to the United States. Next, Europe has approximately 4,000 billion euros, with France and Germany as the main markets in addition to Italy. Coming in last are Africa (300 billion), where the market is still limited, and Oceania (250 billion), where credit collection times are shorter.
The Deep Tier platform involves every player in the supply chain: clients and supply chain leaders looking for solutions to improve their profitability and manage their liquidity more effectively; suppliers – that is, SMEs that want to access ways of advance payments at affordable rates and reduce collection times by improving their NFP (Net Financial Position); and financial institutions (both traditional and non-traditional) that want to increase their customer base and their loan volumes while mitigating the risk of these operations.
Michele Giordani, GELLIFY managing partner and founder, commented: “This venture building initiative is a clear example of the disruption opportunities in GELLIFY’s ecosystem, which has brought to life a company with exceptional speed in its ability to go to market and deep ties in the industrial landscape. Deep Tier will leverage fintech technologies to improve supply chain effectiveness, unlocking the value of business relationships: It will ease access to finance for suppliers of all sizes and locations by closing the knowledge gap between industrial leaders and financial institutions, allowing the former to strategically use financing as a factor in their industrial relationship with suppliers.”
Marco Storchi, a board member at Comer Industries, stated: “The commitment that Comer Industries shows towards sustainability extends to this initiative, which will involve the entire supply chain. As a supply chain leader, Comer Industries wants to convey to its partners along the value chain its expertise in information management, which will be used to speed up short- and medium-term business management decisions. As a result, the entire supply chain can increase its competitiveness and focus itself on improving manufacturing activities.”
Andrea Tinti, the CEO and founder of IUNGO, said: “Deep Tier’s model, like the one of IUNGO, puts the supplier at the core of the process, providing a set of financial instruments to choose from that take into account the value of the industrial relationship within the supply chain. This solution, which is integrated with the IUNGO platform, is an extraordinary response for the market and will open the doors of digital financing to all players in the supply chain in a simple and immediate way, starting with the 100,000 members in our network.”