Our digital-funding-network will support India pharma’s next phase of super-growth
Ravi Tanniru, SVP Enterprise Sales, C2FO India explains C2FO’s concept to Viveka Roychowdhury, and why a high growth industry like pharma, especially in the COVID-19 era, requires newer technologies like Collaborative Cash Flow Optimisation to scale their financing strategy rapidly
How does C2FO work as a financial technology/service?
C2FO is the first and largest working capital marketplace in the world and is working to deliver a future where every company has the capital it needs to grow.
Financial tools on the C2FO platform provide better, faster, and more flexible financing solutions, enabling enterprises (of all sizes) to manage their working capital needs. Our ability to create a seamless match between Accounts Receivable (A/R) and Accounts Payable (A/P) has enabled efficiency in cash flow between trading partners. While suppliers can take control of their cash flow, companies can increase EBITDA and gross margin and earn a better return on short-term cash, which improves the financial health of their supply chains.
C2FO’s strategy is clear: eliminate or greatly reduce credit risk and make capital available on tap. Our tactics are equally simple and clear: match accounts payable and accounts receivable from the world’s companies on a platform that is fast, affordable and easy for all to access.
How can C2FO as a financial technology/service help provide liquidity to pharma companies in particular, as they have to scale up rapidly to meet COVID-19 driven demand while being hamstrung by price caps and other regulatory issues?
In India, C2FO works with more than 100 leading corporates, including some of India’s top pharma companies. These corporates are using the C2FO platform to improve their own and their vendor partners’ access to liquidity. At the same time, C2FO solutions bring efficiencies in a company’s treasury and payment processes to drive cost optimisation and improved operating margins.
In recent times, the rise in demand has put pressure on pharma companies’ faster turn-around of raw material, increasing their need for more capital. C2FO offers a single front-end technology platform backed by balance sheet-friendly financing options like accelerating cash flow (from global pharma buyers) and financing from C2FO’s multiple funding partners. The programme does not require KYC or other documentation while it addresses the cash flow needs of the pharma company and their diversified vendor base in India and across the globe!
Given the rapid scale that the pharma companies are trying to achieve, capital requirement remains a critical aspect. C2FO has brought in a combination of Dynamic Discounting (DD) and Dynamic Supplier Finance (DSF) to enable these companies to support their own or their suppliers’ need for affordable capital.
What have been the major challenges and learnings while adopting C2FO in the sector in India?
The Indian pharma sector is expected to grow to $100 billion by 2025 and there is an immense opportunity to leverage on its low-price, high-volume factor. The high growth of the Indian pharma industry requires companies to adopt financing strategies that will support the dynamic financing needs of their supply chains. While traditional financing channels like banks provide some liquidity support to the pharma supply chains, they are usually limited by their credit appetite and regulatory requirements of KYC and documentations. A high growth industry like pharma requires newer technologies like C2FO to scale their financing strategy rapidly.
What have been the savings after implementing C2FO? Any success stories?