Greensill tech partner Taulia secures funding from JPMorgan consortium to keep payments platform running

Greensill’s technology partner secures funding from a consortium led by JPMorgan to keep its payments platform afloat.

On of Greensill’s technology partners has secured funding from a consortium led by JPMorgan to keep its platform afloat. Photographer: Markus Hibbeler/Bloomberg

Greensill’s technology partner for a number of high profile clients, Taulia, has secured $US6bn ($7.76bn) in funding from a consortium led by J.P. Morgan to keep its platform running.

The San Francisco-headquartered company provides the platform for companies to charge their smaller suppliers a fee for early payment. Greensill had been the financier for a range of Taulia’s clients, leading the company to source additional funding following Greensill’s collapse.

But Taulia’s entire business was not exposed completely to Greensill’s insolvency, with the US group ending its exclusivity arrangement with Greensill in 2019. Since then, Taulia has embarked on a multi-funder model to diversify its funding and give clients choice over financiers.

On Tuesday, Greensill filed for administration, stating it was in “severe financial distress” and unable to repay a $140m loan to Credit Suisse, following ­“defaults” from its key customer: Mr Gupta’s GFG Alliance.

The end of Taulia’s exclusivity arrangement with Greensill is understood to have formed a speed hump for US private-equity giant Apollo Global Management, which is expected to strike a deal to buy most of Greensill’s assets.

The Australian understands that Taulia has been in discussions with Apollo and is happy to add it to its list of funders but will not return to an exclusive arrangement, which would add more value to an Apollo/Greensill deal.

After all, the multi-funder model allowed Taulia to announce on Thursday that it secured $6bn funding from a consortium led by J.P. Morgan and including UniCredit, UBS and BBVA.

Taulia chief executive Cedric Bru said the consortium will provide any necessary funding in a “timely fashion and more than $US6bn in funding is available to suppliers currently”.

“Taulia’s priority, first and foremost, has been to enable businesses both large and small to unlock liquidity trapped in their supply chain in order to invest, operate and thrive,” Mr Bru said.

“In the current environment, with the potential loss of a funder, our commitment to providing choice has become even more paramount.

“We are committed to this model moving forward and will continue to provide our customers with a wide range of funding choices. We are pleased to work with leading financial institutions. It speaks volumes about their commitment to their clients, supply chain finance and the role it plays in global supply chains.”

Taulia has been caught up in several big businesses using supply chain financing arrangements to blow out supplier payment times beyond the standard 30 days.

Taulia provided “dynamic discounting” to Rio Tinto, which involved Taulia negotiating a discount with Rio’s suppliers in exchange for early payment. This arrangement didn’t rely on a third-party financier, with Rio paying its bills directly. The mining giant has switched off this platform to small and medium sized businesses.

Meanwhile Telstra had used Taulia’s platform to offer supply chain financing via Greensill. When it launched the scheme - which was optional - in early 2019, Telstra extended its payment terms from 45 to 62 days from the end of the month the invoice was lodged — a period that effectively represented up to 90 days in some cases. The move was expected to boost Telstra’s bottom line by about $500m a year, according to a promotional video published on Taulia’s website.

But Telstra also switched off the platform, after The Australian revealed Taulia negotiated discounts on behalf of Telstra and had a range of tools at its disposal — including big data and artificial intelligence — to calculate a supplier’s willingness to discount its invoices and how much of a discount it could take.

Following the revelations published in The Australian, Telstra introduced 20 payment terms for its small and medium-sized suppliers, which represented about 85 per cent of its total suppliers.

This effectively removed the need for supply chain financing and Telstra began a year-long process to remove the platform altogether, with the turn-off date brought forward from the end of this month to last week.