When a company is shopping for materials, there’s no catalog of B2B merchants like there is for consumer goods — a company’s needs are too specific and often too large for consumer-type platforms to be successful.
wherEX Co-Founder and Head of Growth Benjamin Garcia said eSourcing, however, “has really taken off … because we give the ability to these companies to do specific quoting of their products and services. Whatever they need is what is quoted, and the suppliers then come and bid for it.”
Garcia said in an interview with PYMNTS, though, that there’s currently “a lot of pain in going through the payment process” in eSourcing. Ninety-nine percent of B2B payments in Latin America, where whereEX does most of its business, happen electronically between the bank accounts of the purchaser and the buyer.
“But there’s a huge opportunity to bring payments on the platform to a very simple buy now, pay later [(BNPL)] interface for the B2B world,” Garcia told PYMNTS.
Supply chain finance is very underpenetrated in the markets that wherEX works, he said, “and so making it easy for them to pay through our software and then adding on the edge that they can get some financing and some days to pay that transaction is super attractive now.”
WherEX has about $800 million worth of transactions flowing through its platform annually, but by the end of this year, the company hopes to reach more than $1 billion, Garcia said. Currently, however, supplier bidding to clients happens on a separate track from payments so that transfers can be made between bank accounts. The goal is to introduce a BNPL-type financing tool in the coming months, which will be “just a huge value-add of services.”
“Once you notice that suppliers are getting paid faster, they’re getting more transparency on when they’re getting paid … it’ll be just a really strong accelerator for more suppliers getting on board and therefore more clients getting on board,” Garcia said.
Transparency, he added, is one of the biggest value-adds as suppliers often don’t know when they’ll be paid after selling products, “so that’s what we’re looking at in terms of how we’re growing our product.”
WherEX started in 2016 in Chile’s salmon industry, which is the second-biggest export for the country after copper. Garcia said that at the time, salmon companies had 300 to 500 providers they would go to for products despite “tons of suppliers that wanted to sell to these companies.” Garcia and his co-founder put together whereEX with 2,000 suppliers for five salmon companies as a minimum viable product. By the end of the first year, 60 percent of Chile’s salmon companies used the platform.
“We started to find savings, we started to find better payment terms,” Garcia told PYMNTS. “We found better quality, better lead time in terms of delivery, and, at the end of the day, better provider service.”
Since then, wherEX has expanded to nearly every industry in Chile, as well as into Peru, Mexico and Colombia amidst a pandemic-driven acceleration in digital adoption. Since the pandemic began, Garcia said wherEX’s business has grown by about 220 percent “just because of this need for procurement teams to digitize.”
With $7 million of Series A funding closed last week, the company intends to continue its Latin American expansion and extend into the U.S. next year. Many of the companies wherEX serves in Mexico have been asking the platform to cross into the States, he said, “and so it’s very organic growth. We’re expanding with the same customer base and just creating that network of suppliers in the U.S. to service these companies.”