C2FO stands for “Collaborative Cash Flow Optimization,” but that only explains part of our mission to deliver a future where every company in the world has the capital it needs to grow.
When it comes to generating effective working capital for growing companies, we live in a broken financial system.
It’s a global problem, with an estimated $43 trillion in worldwide “trapped cash”—capital that’s tied up in accounts receivable, with payment terms as long as 90 to 120 days. Of that $43 trillion, as little as $3 trillion is being financed at any given time.
The challenges to the financial system are risk and visibility. Banks are understandably concerned about potential loss and credit risk when lending. At the same time, traditional and alternative lenders lack full visibility into transactions between a business and its customers.
So, tens of trillions of dollars linger somewhere along a lengthy payment cycle. At C2FO, we work to give businesses quicker access to more working capital. It’s their money, and they could use it now.
A better platform for the payment cycle
C2FO was created with the idea of putting more of that trapped capital to work—right away.
Beginning in 2008, we envisioned a digital working capital platform that benefits both vendors and their customers. C2FO’s technology enables vendors to receive early payment on invoices of their choosing, at discounts that they determine. The customers of those vendors use the invoice discounts to safely increase margins and profits, while keeping their supply chains healthy and productive.
By forging relationships with both vendors and their enterprise customers, C2FO’s early payment program provides the following benefits:
- A simple, easy-to-use platform where vendors receive payment directly from their customers.
- For vendors, the flexibility to use early payment as they need it, at invoice discounts that they determine.
- For enterprise customers, better gross margins and EBITDA.
- For both vendors and their customers, more working capital to use for growth, investment and expansion.
That vision for C2FO has flourished. Since our first transaction in May 2010, we’ve generated more than $100 billion in working capital funding and accelerated payment by more than one billion days. C2FO’s early payment program serves more than one million customers representing $10.5 trillion in annual sales across more than 180 countries.
That’s a drop in the bucket to solving the world’s $43 trillion working capital issue. But C2FO’s mission has just begun.
Meeting a working capital need
Like many good ideas, C2FO was born out of the need for something better.
In 2002, as leader of an earlier technology start-up, C2FO founder and CEO Sandy Kemper made the kind of phone call that no chief executive ever wants to make. He called a key customer to ask for early payment on a $1 million invoice in order to meet expenses.
The customer agreed to pay early, in exchange for a discount. Kemper agreed to a 1% rate. The receivable was paid 30 days early.
The phone call led Kemper to two realizations: first, that his company’s strong relationship with its customer was crucial to receiving early payment. Secondly, that the phone call could have gone badly, with the customer losing confidence in Kemper’s company. There was risk involved in asking for an early invoice payment, and no efficient vehicle for finding the right price to accelerate that payment without a process that was manual and cumbersome.
C2FO eliminates all these risks, issues and inefficiencies by offering an online network sponsored by the customers of our hundreds of thousands of vendors. These customers want to pay their vendors early, at a rate that works for each and every vendor, so that they have the working capital to continue growing their business and solving problems.
Before C2FO, there was no scalable marketplace and pricing mechanism available from all their customers whenever needed and at a price that the vendor set. Our solution and what we represent can be summarized with the following three statements:
- We believe that a network solution can quickly and efficiently bring more working capital to those who need it.
- We believe companies should be able to receive early payment on receivables at a price that is right for them and in the most convenient fashion.
- We believe that accelerating the payment cycle has the potential to unlock trillions of dollars in liquidity for millions of businesses around the world.
Core beliefs and values
The name C2FO is short for “Collaborative Cash Flow Optimization.”
That explains what we do, but not everything we stand for. C2FO is working to deliver a future where every company in the world has the capital it needs to grow.
In transforming billions of dollars in receivables into working capital, C2FO’s early payment program helps companies and economies grow. Based on research conducted by the MIT Sloan School of Management and the Harvard Business School that ties accelerated payments from the federal government to job creation at small business contractors, C2FO estimates that the billions of dollars it accelerated in early payment helped generate more than 100,000 jobs in the United States alone in 2019.
With expansion into markets including India, China, Europe and Australia, C2FO has set a goal of helping to create more than a million jobs a year worldwide by 2025.
“What happens when companies access more working capital?” Kemper asked. “They run their business, they buy more inventory and they hire more people.”
At C2FO, we think working capital is water for commerce, as important to businesses as water is to biological life. Freeing the cash trapped between A/R and A/P benefits everyone, ensuring more efficient markets and greater liquidity for companies around the world.
And that’s what we stand for.