Securafin combats unpaid bills

Dries Wijnen - SecurafinDries Wijnen was an atypical law student with an unusually great interest in entrepreneurship. For example, he founded E-ducated! and, as a member of the Flemish Law Society student club, he was one of the people behind Lcie, the Leuven Community for Innovation-driven Entrepreneurship. As much as he enjoyed studying law, he sensed during work experience at various law firms that he was sitting on the wrong side of the table: “I was giving legal advice to new entrepreneurs, and that was exciting, but I wanted to be one of them.” That was why an extra Masters in Innovation & Entrepreneurship seemed to be a logical step. His start-up, Securafin, won second place in Pitch @ Vlerick.

Eye-opener

That masters course was a real eye-opener for Dries: “During all those group assignments you find yourself working closely with people who all think in completely different ways. There is group work in a law degree too, but you learn a specific way of reasoning. Here we were a mixture of law students, engineers and psychologists. That in itself was enough to make the course worthwhile.”

Solid basis

But he also looks back with satisfaction on the different subjects he studied: “They gave me the contextual framework I was lacking. In terms of content, this masters year was complementary to my legal training. As a law student, you hardly touch upon economic subjects. That made subjects like corporate finance, financial accounting and entrepreneurship really interesting for me. They provided an important basis on which to build a start-up or to work on innovation in a managerial role.”

Tool for factoring

For Dries, the course was the beginning of his own start-up: Securafin, a blockchain application (see box text). “The aim of Securafin is to get rid of the problem of unpaid bills and late payments between businesses, or at least to reduce them. Businesses can currently get insurance against unpaid bills or use a factoring service. The latter option means that your invoices are pre-financed by the bank. But it is extremely complicated for the bank to check whether an invoice is correct and whether the other party, the debtor, has accepted it. There is a huge amount of e-mail traffic involved. And your debtors have no incentive to cooperate. It isn’t easy to complete factoring either. Securafin ensures that the debtor receives the invoice and accepts it, although that doesn’t yet mean it has to pay it. The invoice is put on a blockchain along with the acceptance. The bank receives the invoice, including acceptance, so it knows that it can finance it without any problems.”

Win-win

How do you persuade a debtor to cooperate? “By including incentives in their contract: granting a payment period or a discount for accepting an invoice quickly, for example. We have also made the process really simple: if you click on ‘I accept the invoice’ in the invoice email, that invoice is sent automatically into your accounting system. That is also an incentive for businesses.”

‘Plan B’

How did the idea for Securafin actually come about? Dries smiles. “For the entrepreneurship class, we had to write a business plan based on a specific idea. My group came up with a proposal for an intelligent pill box. But it turned out that it already existed. We skipped class to brainstorm on trends and problems that need solutions, and that was how we ended up with unpaid invoices and pressure on working capital in the construction sector. During the start-up accelerator module in the second semester, we had to develop that start-up further and find out whether there was a market for it. Conversations with various companies confirmed that it does have real potential. Incidentally, we had already broadened our concept, because unpaid invoices occur everywhere.”

Focus!

In construction projects, payments are phased. The final payment in particular often leads to disputes resulting in legal proceedings that drag on for years. “You could avoid situations like that by appointing an independent third party to assess whether the work has been done properly and whether the invoice for the final payment can be accepted. But, all in all, it is still complex. We thought it would be better to focus on simpler sectors in the initial phase. There is enormous need among lawyers and accountants, for example, and the situation is a bit less complicated for them.”
 
The biggest problem in the development process is staying focused. “It is pretty difficult, because there are always interesting tangents to go off on. But the point is to stick to your guns whilst incorporating enough flexibility to be able to make adjustments where necessary.”

And what now?

“We currently have a working prototype and we are negotiating with banks and insurance companies. We hope to start for real as soon as possible. ‘We’ means me, my father and an engineer who is further developing the technical platform.”

Dries expects that scaling up will probably be the biggest challenge in the long term: “Setting up a pilot project is one thing, but it is a different matter as more parties start getting involved, in Belgium and abroad, all wanting different things.”

Stimulus

Is a year-long course like this sufficient to become an entrepreneur or innovator? “It certainly gives you the context and tools to embark upon new challenges yourself. The Vlerick network played an important role in Securafin’s development - feedback from the professors, coaches and the Pitch @ Vlerick jury members was invaluable. But the one thing that will always stay with me is the vibe during that masters year. That positive vibe was a huge stimulus in daring to take the plunge.”

 

What is blockchain?
Blockchain is a technology that rules out the need for intermediaries in transactions. “If you want to buy or sell a house, you need to speak to a solicitor. If you want to transfer money, you need a bank. We have decided that solicitors and banks are reliable third parties. Furthermore, it has been set down in law that they are the only ones who can carry out transactions like these”, Dries explains. “Blockchain is a decentralised information network that determines precisely who is the owner of what”, he continues. If something changes owner, that item of information is adjusted. Precisely because it is a decentralised network, it is more secure against hackers - the information is spread between millions of computers. The best example of blockchain technology has to be bitcoin. Anyone who wants to can buy bitcoins with ordinary money and send them quickly and simply to anyone at all, anywhere in the world, without involving a bank.” That is the power of blockchain: peer-to-peer transactions without third parties. “For the time being, those third parties do still exist and they are very unlikely just to let themselves be pushed aside. But in the longer term, the technology really could start a revolution”, Dries concludes.

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