Flexport Capital, the trade finance arm of third-party logistics provider Flexport, announced Thursday that it has secured a $200 million credit facility from insurance accounts managed by global investment firm KKR to support the expansion. geography continues and the development of more financial products.
Flexport’s suite of financial services provides importers and exporters with access to working capital for inventory and logistics expenses. Suppliers often require upfront payment for goods that can remain stuck at sea and land terminals for months before they can be sold to generate cash.
Flexport said demand for trade finance is now high, with many companies carrying too much inventory and struggling to pay suppliers due to rising supply chain costs. An internal funding line also provides a liquidity option for shippers as the economy slows and lenders tighten access to credit.
The KKR (NYSE:KKR) credit facility is the first external financing for Flexport Capital since its inception in 2017. Flexport has financed more than $1 billion in invoices for more than 500 freight owners in more than 20 countries, including nearly 150% over one year. annual growth in the size of its portfolio. This year, it expanded its lending offerings to customers in five new regions: Canada, UK, Netherlands, Belgium and Luxembourg.
As a digital freight forwarder, Flexport’s core strength is the automation of international trade processes and the sharing of data on a central platform. Flexport Capital offers clients flexibility over traditional lenders because it has in-depth knowledge of their business models, purchase order data, and shipping data down to the product level. This data helps Flexport make decisions about when to extend credit and offer more flexible terms. Flexport also offers customizable repayment terms.
“Flexport Capital started from the belief that a company’s supply chain should be a critical competitive advantage and catalyst for growth, not a barrier to working capital,” said Justin Sherlock, head of Flexport Capita, in the ad. “With deeper visibility into the overall health of the supply chain, we can help businesses of all sizes – and their partners – remove liquidity constraints amid uncertainty. I am delighted that KKR is providing a credit facility to help us achieve our vision of making global trade easier for everyone.
Funding KKR is one of the first major decisions Flexport has made since former Amazon top executive Dave Clark joined the company as co-CEO on Sept. 1.
Click here for more FreightWaves/American Shipper stories by Eric Kulisch.
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