Omni's Pre-Seed Magma Memo

We use Magma Memos to source and review more than 1000 startups per year. We give personalized feedback to all of them. We invest in 20-30 of them. If you want to understand the background on the Magma Memo, read Part 1, How we use the Magma Memo to invest in Latin America's best entrepreneurs. Read Albo's pre-seed Magma Memo in part 3.

In 2016, Omni, called Portal Finance in those days, applied to Magma Partners for the first time via our online form. It was a completely cold inbound contact. Since then, Magma followed on 4 times and Omni was acquired by Greensill Capital in 2020. This is Omni's original Magma Memo from 2016 that led to Magma’s first investment.

  • Date - October 18, 2016
  • Project Name - Portal Finance
  • Founder Name - Diego Caicedo
  • I’m looking for - Investment
  • Stage - MVP
  • Founder Status - Full Time

Company Description

Portal Finance provides mission critical finance to SMEs using a proprietary Data Driven Factoring model. We provide APIs to third parties to integrate factoring and supply chain finance into ERPs, e-invoice and Supply Chain Management systems.

We have a working MVP that will start its private beta phase during this month. We organized a core team of 6 full time developers. We have reached agreements with partners to develop Netsuite / Oracle / JDEdwards / SAP plugins to interface with our platform as well as develop a joint commercial program for both the beta and public launch of the platform in Colombia and Chile.

Factoring companies for the most part lack any sort of risk management system and operate on a case by case basis making scaling the operation difficult due to two large factors, one is manual processing and decision processes and the second is that companies currently operating have no access to securitization or organizing SPVs to deploy larger amounts of capital due to the lack of organized risk protocols. 

What is your Product or Service?

Portal Finance is an invoice lending platform that provides APIs for Invoice Origination to eInvoice, ERPs and Supply Chain Management Platforms. We are able to gather invoices score and price advances based on a proprietary risk engine and provide paperless and realtime financing to SMEs.

Our APIs are comprised of three major functionalities, providing eInvoice functionality, factoring and collaborative supply chain financing. We provide the APIs and through a partner program, we seek partners that carry out the sale and implementation of our services into their clients software platforms.

What Problem are you Solving?

Currently Factoring is plagued by predatory lending practices that price them between a 3% and 5% monthly discount this is a result of two large trends in the industry, first origination is expensive and is currently a manual process involving lots of documents and personnel managing limited accounts that drives the costs up at commercial factoring operations. The second is that bank factoring operations are regulated under BASEL III limiting the scope of companies that can comply with the risk standards that banks must adhere to. 

Tell us about your traction...

We have a distribution model based on leveraging the existing relationship corporations have with their external technology providers. For this we have 4 partnership agreements that are in place that will provide access to SAP, Oracle, Netsuite, Peoplesoft ERPs to implement, we are currently finalizing agreements with 2 large eInvoice platforms in Chile for our beta Program. 

Tell us about your team

One team member brings over 30 years of experience in the commercial factoring industry and saw the deep change impact that electronic factoring would have on the industry both by broadening its reach and lowering its cost to a point where traditional factoring companies would be out priced and determine a key inflection point in the industry. That tied to Diego's experience in structuring SPVs to raise funds and operate under different legislations enables Portal Finance to operate at a large scale. Our development team has over 10 years leading and developing complex enterprise solutions for corporations of all sizes.

  • Monthly Revenue - $0
  • Accumulated Revenue - $0
  • Monthly Expenses $20,000
  • Investment Seeking $120,000

How will you use your investment?

We will use it to fuel our Launch in Chile and the structuring of our SPVs. This will lead us to a post revenue stage to enable us to raise a Seed round in order to scale Chile and deploy Colombia. 

Previous Investment Raised - $0. We are bootstrapped and the founders have put in all external capital requirements.

Cap Table - Redacted