Back in March we covered TradeShift, at a time when there wasn’t too much information on the company out yet. A few weeks ago, Wall Street Journal dug into the company and found out what they’re really up to. The company publicly stated that they’re building a free invoicing platform for companies, but while doing so – they’re building a Unified Business Language, developers can build more apps on.
The Danish startup went to market with offering free purchasing and invoicing services to mainly small companies. Behind this simple approach though, is a very big untapped opportunity I haven’t seen elsewhere. The company is trying to change the way companies do business with each other. In the end, they want to make it more effective.
Christian Lanng, the CEO behind the company has brought in some high profile people to the company. One of those is John Bosak, he created XML. John Bosak is also the one in charge of the Unified Business Language, or UBL. Christian Lanng estimates, according to the WSJ article that, 80% of business needs can be represented with it – it’s very flexible. UBL is a kind of XML that is completely open standard and universally supported.
The company raised its first round of financing, 200 000 euros, from venture capitalists. Christian Lanng also states that they have raised a second round of financing, that they cannot disclose yet. “We are now very well funded”, he states.
How well is TradeShift doing? Very well to say the least. 95% of all Danish government invoicing goes through their system. Furthermore, in 11 months, they’ve managed to get some 70 000 small businesses in Denmark on board. That’s about one third of the companies in the country. Christian Lanng also states that they have clients from more than 100 countries signed up.
The catch in all this is TradeShift’s business model. They’re basically adopting the business model from App Store, Ovi Store and similar market places – they offer the platform for free, but charge app developers for a share of revenue. “Dunn and Bradstreet are building a credit-rating app. And here in Denmark one of the big banks, Danske Bank, is building a payment application”, comments Christian Lanng.
If this isn’t revolutionary enough, the company is also looking to build its own payments platform. With it, companies would be able to send any amount of money for about 50 euro cents. If enough companies begin to use their platform for invoicing, the payment of those invoices will become a natural extension of use – forcing banks and other financial institutions to take another look at their businesses and pricing.
Update (4.1.2011 @ 12.30): There are a few corrections in the comments section by Christian Lanng regarding the article.