Standard Chartered, the banking group, and Linklogis, a supply chain finance technology provider in China, have announced a joint venture to establish Olea. This will be a fully-digitised trade finance origination and distribution platform.
Headquartered in Singapore, Olea will be headed by Amelia Ng (SC Ventures, the innovation, fintech and ventures unit of Standard Chartered) as CEO and Letitia Chau (Vice Chairperson and Chief Risk Officer of Linklogis) as deputy CEO.
“By marrying Standard Chartered’s international trade and risk management expertise and unparalleled knowledge of Asia, Africa and the Middle East with Linklogis’ innovations in supply chain technology, Olea is uniquely positioned to reinvent trade finance and be a force for good,” said Ng.
“Olea aims to disrupt today’s trade finance model by matching suppliers’ financing needs with alternative liquidity from investors seeking a compelling asset class linked to the real economy.
“Standard Chartered is not only one of Linklogis’ institutional shareholders, but also an important strategic partner. Since 2019, Standard Chartered and Linklogis have accomplished many projects together. The new joint venture, Olea, offers an agile and robust platform, using blockchain and AI technology to drive exceptional efficiency and transparency for suppliers seeking affordable and convenient financing.”
Olea, according to its proponents, will seek to bring together:
- institutional investors seeking opportunities in an alternative asset class
- businesses requiring supply chain financing, subject to regulatory approval.
In effect, Olea aims to disrupt today’s trade finance model by matching suppliers’ financing needs with alternative liquidity from investors who are seeking an asset class linked to the real economy.
Trade and, therefore, trade financing are essential ingredients for sustainable economic growth to occur. This is likely to be even more when businesses emerge from the pandemic and associated lockdowns. In effect, Olea hopes to bring together Linklogis and Standard Chartered strengths in one space. In so doing it hopes to represent a next generation of supply chain financing, providing:
- risk assessment
- fulfilment of institutional demand for alternative investments.
Via Olea’s risk analytics and secure platform investors can search for, and access, investment options with returns that align with their desired risk profiles. In this way it provides a transparent, potentially speedier with less hassle way to access working capital for supply chain participants regardless of size:
- investors gain access to a full range of trade finance assets globally – and particularly in Asia – with credible insights on asset quality
- supply chains partners can access financing via transparent and frictionless processes.
“The advent and application of emerging technologies have become an important driving force for the global economic transformation, and new technologies are being implemented in many fields such as trade finance and supply chain finance,” said Charles Song, Founder, Chairman and CEO of Linklogis.
“Linklogis, as China’s largest technology solution provider for supply chain finance, can bring its top-notch operating experiences and industry-leading technologies into Olea. We believe that the joint effort between the two firms can take the lead in operating a flexible, sustainable and scalable supply chain financing business proposition.”
Enterprise Times: what does this mean
Standard Chartered and Linklogis’ relationship began in February 2019 when both companies signed a memorandum of understanding to explore the co-creation of solutions that supported the supply chain finance ecosystem. They completed their first joint deep-tier supply chain financing transaction in August 2019.
Subsequently, they have executed other transactions and, in January 2020, Standard Chartered announced a strategic investment in Linklogis. This marked the Bank’s first investment in a supply chain platform in China.
In terms of financing, this could represent a new opening (compared to more conventional trade finance initiatives). Whether Olea can flourish when competing against the broad involvement base of TradeLens remains an open question. Trade finance as a single ‘specialty’ may have become obsolete, even with the new financing sources that Olea wishes to capture.