In the current economic crisis, late payment of invoices can put SMEs in serious difficulty. Danish startup Likvido, which has developed an automated system for dunning and collecting payments, has just raised 2.5 million euros.
Unpaid bills can be very costly
If, in normal times, late payment of invoices already puts a strain on the cash flow of SMEs, the consequences can be even more severe in times of economic crisis.
And yet, according to a study by KPMG in partnership with Sidetrade, the number of late payments has increased in recent weeks. Whereas 2 out of 10 invoices were paid late before the health and economic crisis, this is now the case for 3.5 out of 10 invoices.
The founders of Danish start-up Likvido, Maximilian Frimmer and Lars Holdgaard, have personally paid the price: their previous start-up went bankrupt precisely because of unpaid invoices.
An automated dunning and payment collection solution
To help SMEs overcome this problem, startup Likvido has developed a system for automating invoice management and collection processes. This solution is particularly suited to companies with around 50 employees, who process more than 50 invoices a month.
Now in its second year of operation, Likvido has around 2,000 customers who use the SaaS (Software as a Service) solution, which integrates with their own accounting software. Invoices, reminders and payment collection are fully automated, for a monthly subscription and transaction fee. The Danish startup has seen its customer base grow with the coronavirus crisis.
The 2.5 million euro fund-raising was led by the European investment fund BlackFin Tech. Likvido aims to expand internationally, starting with another European country within the next 12 months.