Tradeshift has announced new funding from HSBC. They have launched a joint venture that will focus on developing embedded finance solutions and financial services apps. HSBC will invest $35 million into Tradeshift in two stages. They will also have a seat on the board as part of the agreement. The funding round intends to raise around $70 million from HSBC and other investors. Existing investors include American Express Ventures, Goldman Sachs, Intuit, Pavilion Capital Partners and Santander Innoventures.
The new joint venture is planned to launch in 2024, and more details will be announced over the coming months. The company will deploy digital solutions across Tradeshift and other platforms. These include payment and fintech services embedded into trade, e-commerce and marketplace experiences. The global expertise of HSBC will also enable Tradeshift to scale its business and commerce proposition worldwide.
Christian Lanng, CEO and Co-founder of Tradeshift said, “The world’s biggest trade bank and the world’s largest trade network are joining forces. Our deepening partnership with HSBC delivers a strong foundation from which to scale and accelerate our vision of a trade network that creates economic opportunity for businesses everywhere.
“HSBC’s reputation and global infrastructure bring instant credibility and broad appeal to any financial solutions brought to market through the Tradeshift platform. It’s transformative, and it’s a tremendous validation of the innovation and product architecture we have developed over the past decade.”
HSBC continues to drive innovation with results
The announcement coincided with the HSBC 2023 interim results. The global bank reported revenue of $36.9 billion and profit before tax of $2.7 billion. Barry O’Byrne, CEO of Global Commercial Banking at HSBC, commented on LinkedIn, “We’ve delivered a strong set of results in the first half of the year. We’re supporting this growth in Commercial Banking by delivering for our 1.3 million clients around the world and helping more customers to expand internationally than ever before.
“We’re gaining momentum through our new Innovation Banking practice, scaling and strengthening our digital channels and supporting our clients’ net zero transition journeys. Thank you to all colleagues across our markets for your impact, energy and commitment.”
The investment into Tradeshift and the launch of a new joint venture see HSBC continue to support digital innovators in digital and cross-border eCommerce. Last week, HSBC made a strategic investment in Dowsure, one of Amazon’s Seller Lending Programme partners, to introduce data-led trade finance for cross-border eCommerce merchants in mainland China and Hong Kong.
On the JV and investment in Tradeshift O’Byrne said, “Enabling and growing global trade has been in HSBC’s DNA for almost 160 years. We are very excited to partner with Tradeshift to help businesses and their suppliers trade more smoothly using world-class technology and solutions that the joint venture will deliver.
“This agreement supports our strategy of being a digital first bank, which includes our commitment to partnering with fintechs and embedding our solutions into the platforms of others.”
Enterprise Times: What does this mean?
While there is little information about what the joint venture will consist of and how it will use the Tradeshift platform, this is a significant step for the cloud-based B2B commerce network. The investment from HSBC will also help the company to extend its reach into new markets. Its platform already supports over $260 billion of annual gross merchandise value for a million business users.
With HSBC supporting more than 1.3 million businesses worldwide, it will be interesting to see whether Tradeshift, possibly via the joint venture, can provide services to these companies. It could mean a huge growth acceleration for Tradeshift.
However, for the moment, until more is known about the JV, the important fact is that Tradeshift has raised another $70 million. Bringing its total raised to $1.1 billion (according to Crunchbase). The funding raise itself is therefore fairly insignificant. It is the partnership with HSBC that is striking.
