entrafin

entrafin is a provider of alternative digital financing models for medium-sized companies. Founder and CEO Christoph Bauer founded the start-up in 2015, which now employs 5 people working in Cologne, Frankfurt, and Utrecht (Netherlands). With around 250 medium-sized customers and more than 800 suppliers from 3 countries, entrafin GmbH is also expanding to Southeast Asia this summer.

How did you come up with the idea for "entrafin"?

The financing problem that we solve with entrafin is something I identified early on in my jobs after graduation. Often, medium-sized companies receive a delivery of goods that the supplier wants to be paid for as soon as possible. The problem is that after the delivery, production and sale of the resulting products only begin, and the funds from the sale are not available for paying for the goods for some time. To bridge this time difference, medium-sized companies often use bank loans, but these are often difficult to obtain in the desired amount, involve a high level of bureaucracy, and often require additional collateral. Therefore, we have developed a new and digital way of business financing that provides our customers – the medium-sized companies – with more liquidity and thus more flexibility in purchasing.

What is behind the idea of "entrafin"?

If externally raised funds for operation and growth are insufficient, medium-sized companies can easily and quickly process their orders through entrafin as an intermediary. The self-developed trading portal ensures that the financing of the business between suppliers, entrafin, and the customer is realized with just a few clicks and within minutes. The supplier of the pre-products is immediately paid by us, the customer receives the goods, and produces during an extended payment period of 120 days, after which we then receive our money back.

What tasks do you perform in your company?

As CEO – especially at the beginning – you are responsible for everything, which leads to an enormous learning effect. Over time, the tasks differentiate and are distributed among the additional employees. For me as CEO, this means that I am operationally responsible for all topics related to business and product development at home and abroad, administratively responsible for all topics related to investors, finances, and legal matters.

What was the biggest challenge in starting up?

The biggest challenge was raising the initial financing for our company. Institutional investors often want to see the first customers or the first revenues before significant investment. In our case, we were lucky to be able to close the first financing round consisting of a venture capital fund and my own funds relatively early on through existing networks and contacts. Subsequently, the challenge was to meet the sometimes very ambitious growth requirements of institutional investors while always having enough funds available to continue growing. Since we are active in the field of corporate finance, the security of our trading transactions always takes precedence over unconditional growth. Decisions between these two poles can sometimes be psychologically challenging, as it's impossible to meet every individual expectation with your decisions.

What drives you? What is your motto?

I'm the kind of person who never gives up. Even when it was really tough at the beginning, when there were times when it wasn't clear whether we could even start the company and subsequently lead it to healthy growth, I had the ambition to keep going. However, I had to develop a certain resilience against fear of loss and fear of failure.

What advice do you have for young founders?

I advise them to get involved in business networks and investor networks as early as possible because it helps tremendously. If possible, I wouldn't start alone; it's much more fun in a team, and you can also delegate some of the responsibility within the founding team. Also, don't think you know and can do everything; seek help and advice.

This portrait is based on an interview with Christoph Bauer in March 2022 and was written by Janice Gust.

 

Here to visit the start-up's homepage.