Pivot, determination, climate, and TikTok this week

#234 - Alex Louisy (Upflow) and #235 Yoann Berno (Climate Insiders)

Jun 09, 2024

Hello everyone,

Apologies for the late send, but I was finishing a training session in the forest last night. 🤗 Have a great election week-end !

Reinventing How Businesses Get Paid.

After starting a well-defined career in Finance, Alex left everything to launch Upflow. He shares his journey, taking us from Paris to New York, from Hexa (formerly eFounders) to YCombinator. This episode focuses less on technical aspects and more on the human adventure, navigating through pivots, flexibility, questioning, self-sacrifice and persistence.

Through this story, you will discover a FinTech scale-up that is rethinking how businesses get paid. Alex discusses failures, entrepreneurial learnings, the complex management of a team spread across two continents, distribution, and strategic partners.

B2B Payments in the US

I have already explored the topic of B2B Payments in Europe on Finscale and wanted to delve into the US market. This is what we do with Alex through Upflow. I will also publish an episode soon with another US player, this time on Stablecoin Payments, focusing on an intriguing use case. 🧐

The B2B payment landscape in the US is rapidly transforming, driven by innovation and changing corporate behaviours.

Traditional methods like cheques coexist with more modern solutions such as instant payments, cash cards, cash, credit cards, and ACH (“Automated Clearing House”) payments.

Source: Bessemer Ventures

Cheques

Before discussing Upflow with Alex, I didn’t realise the proportion of cheque payments in the United States was so high. Historically, cheques have been the primary method for B2B payments in the US, although this trend is fortunately declining.

FedNow Transfers, Fedwire, Real-Time Payments (RTP)

In the United States, several payment infrastructures coexist.

Deployed in 2023 and managed by the Federal Reserve, FedNow is a real-time instant payment system available 24/7. It allows banks, financial institutions, businesses, and individuals to make transactions in seconds. This system is based on a decentralised settlement model, unlike RTP.
Created in 1918 and also managed by the Fed, Fedwire is intended for real-time high-value fund transfers. Unlike FedNow, it is only available on banking days and is mainly used by banks and large financial institutions for high-value transactions requiring immediate settlement. This system uses a centralised clearing house.
Launched in 2017 and managed by The Clearing House, RTP is the first widely adopted instant payment system in the United States. This system uses a centralised settlement model, where all transactions pass through a central clearing house to simplify the settlement process.

ACH

The ACH network enables funds to be transferred directly from one bank account to another. ACH transactions are often less expensive than cheque or card payments, with a processing time of one to three business days. An ACH payment differs from a European bank transfer in the number of financial actors involved in processing the transaction.

Upflow

With a recent Series A round of USD 15 million, followed by a USD 5 million extension in 2024, Upflow optimises the way businesses collect payments from their clients to improve cash flow cycles.

Integrations: QuickBooks, Xero, Netsuite, Chargebee, Sage, or Stripe Billing
Clients: Welcome to the Jungle, Malt, Sardine, Lattice, Front
Investors: YC, Hexa, Lorimer Ventures, Hedosophia

Take a look 👉 here.

Cracking the code of green investments.

A unique meeting between two podcasters.

This week, I had the pleasure of speaking with an investor (podcaster) who believes that ClimateTech investments will primarily be driven by investor communities.

This “bottom-up” approach, familiar from crowdfunding, is now applied to climate initiatives. Yoann hosts podcasts and a YouTube channel, and has made it his mission to develop this community to have a greater impact on climate change.

You will discover the role TikTok can play in reversing the trend. Climate Insiders focuses on “hardware”, covering numerous innovations from photocatalysis to mycoremediation.

The “Hardware”

Already covered several times on my podcast, from 2050, to Satgana, and Carbon Equity, ClimateTech investment is a topic that fascinates me, sitting at the intersection of innovation and sustainability.

I discussed hardware financing with Pierre Festal and Charles Beigbeder in our 2022 discussions on “New Space”. In terms of climate, it is quite inevitable.

The necessity of financing hardware in the fight against climate change cannot be underestimated.

Why support hardware?

In terms of climate technologies, hardware presents some of the most interesting investment opportunities. It is clear that software alone will never solve the climate crisis; hardware solutions are essential for enabling some of the most significant required transitions and generally come with reduced market risk – no demand problem. :)

A great example is Northvolt (the Swedish battery manufacturer), where the demand for batteries for planned electric vehicle production in Europe is more than five times the volume of confirmed projects in Europe for 2040. Moreover, hardware generally has higher barriers to entry.

OK, hardware investments are usually quite capital-intensive and can take (a bit) longer to realise their potential. That said, the market is evolving in this regard with more exit opportunities for VC investors.

Take a look at the list of Climate Tech unicorns (2023) 👉 here.

Climate Insiders

Facing the climate emergency, communities like Climate Insiders, Time for the Planet, and Climate Club are mobilising to bring together investors and engaged citizens around sustainable projects. In France and Europe, these groups play an important role in providing financial and human resources to support environmental initiatives.

The community Yoann developed has, after one year, 300 investors and has already financed 7 projects 👉 here.

For the media, it’s 👉 here.