MTS, a leading mobile operator and provider of digital services and content, has acquired a 51% stake in blockchain-based trade finance platform Factorin.
The two year-old company touts itself as “the biggest factoring platform in Russia andone of the leading B2B blockchain systems for trade finance in the world.”
Founded by Andrei Maklin with support from venture builder Digital Horizon — an investment company with offices in London, Moscow and Tel Aviv, — Factorin uses blockchain to “reshape the trade finance industry.” It has developed a “comprehensive solution for supply chain financing by digitizing financial interactions between buyers, suppliers, and banks.” This approach translates into financial products for factoring, dynamic discounting, and other trade finance services.
“These are fundamentally new products that would be impossible to replicate using traditional technologies,” says Maklin. “For example, we enable corporate clients to set up their own platforms that provide their suppliers and buyers with attractive offers from a variety of financing providers.”
The platform provides its solutions and services to major Russian retailers — including Magnit, Dixy Group and MTS-affiliated RTC, — their suppliers, as well as “more than 40 banks and factoring providers.” Factorin claims to have facilitated the financing of more than 1.6 million supplies worth over $3 billion since platform launch in 2019, with more than 1,000 companies (both suppliers and buyers) are connected to it.
“The financial infrastructure of the future will be powered by blockchain-based solutions. In the coming years, distributed ledger technologies will provide the secure rails to advance trade finance, settlements, custody, and payments in general.” — Alan Vaksman, co-founder and Managing Partner at Digital Horizon.
Ilya Filatov, MTS VP for Financial Services and MTS Bank CEO, added: “This deal is yet another major step forward in the development of digital products and enhanced services for our B2B customers. Factorin is not only a fast-growing and high-tech trade finance platform, it provides a unique offering that fully leverages all of the advantages of blockchain technology. I am confident that the addition of Factorin into MTS Group will accelerate our growth and further reinforce the company’s leading position.”
According to Rusven, Digital Horizon owned 75% of the company prior to the transaction with MTS. The mobile operator paid 867 million rubles (nearly $12 million at the current exchange rate) to acquire its 51% stake, valuing the company at 1.7 billion rubles. Of the transaction amount, 350 million rubles ($4.5 million) will be injected into the company’s capital. MTS has an option to acquire the remaining shares in the future.
