How Twinco Connects SMEs To The World’s Biggest Fashion Retailers


For small and medium-size enterprises in developing markets around the world, selling to large Western customers can be transformative, enabling them to grow rapidly and create new wealth. But to meet the demands of large buyers with challenging supply chain requirements, these SMEs need access to finance – many miss out on trade opportunities as a result, with some estimates putting the trade finance gap as large as $1.7 trillion.

Trade finance specialist Twinco Capital aims to help to tackle that problem. And the fintech start-up, based in Amsterdam and Madrid, is today announcing a $12 million funding round it hopes will give it the firepower to support more SMEs bidding for lucrative contracts in the clothing sector.

Sandra Nolasco, CEO and co-founder of the business with COO Carmen Marín, says its approach to trade finance is unique. “We are the very first company to offer a global supply chain finance solution that starts funding at the very beginning of the production cycle,” she explains. “We do that on a global basis to small and large suppliers alike.”

Supply trade finance has traditionally worked to a different model. A supplier securing a $100,000 order from a large retailer would fulfill the order and then invoice the customer; to improve its funding, it might then borrow from an invoice finance provider against the value of this invoice, rather than having to wait for the customer to settle its bill.

By contrast, Twinco offers capital at the moment the retailer places the order. Nolasco points out that many small businesses don’t have sufficient funding to source raw materials and secure production capacity for the size of order that a large international retailer might place. Twinco’s capital can therefore ensure the SME doesn’t miss out on such business because lack of funding prevents it fulfilling an order.

In practical terms, a Bangladeshi t-shirt manufacturer, say, receiving a $100,000 order from a European high-street retailer, might ask Twinco for $60,000 of funding. The capital would enable the manufacturer to deliver on the contract, with Twinco getting its cash back once the order is fulfilled and the bill is paid.

“We want SMEs in every market to be able to participate in global trade,” explains Nolasco. “A lack of access to funding is a key challenge standing in the way of that, so that’s where we have focused.”

Twinco works directly with Western retailers; they share details of their suppliers with the company, as well as data on how each supplier has performed in the past – whether it’s delivered orders on time and with the right quality, for example. Twinco’s systems than analyse that data to assess the creditworthiness of suppliers, enabling it to offer funding at an earlier stage of the trade process.

It’s a model that appeals to buyers and suppliers alike. The former take no credit risk and get to work with a broad range of suppliers; Twinco’s systems also collect a rich set of data on suppliers’ commercial, financial and sustainability performance, which helps retailers secure supply chain transparency. The latter get the funding they need to go for larger contracts and support their growth.

Since its launch in 2019, Twinco has grown rapidly. It now works with five large clothing retailers and more than 100 suppliers based in 12 countries including Bangladesh, China, Pakistan, South Korea, Turkey, Thailand, Vietnam and Indonesia. It has so far provided these suppliers with $150 million of funding support.

Nolasco is ambitious for Twinco’s future, eyeing opportunities to increase its influence with its existing client base but also to go further. “We want to change the fashion industry first, but we can make a difference in other sectors too,” she explains. As obvious examples of industries where large players in developed markets work with extended supply chains of smaller firms worldwide, automotive and electronics are potential next steps for the company.

Today’s funding round should enable Twinco to pursue its ambitions more aggressively. The $12 million equity and debt round is led by Quona Capital, with participation from Working Capital Innovation Fund and existing investors such as Mundi Ventures and Finch Capital. “Twinco is focused on a significant pain point in the massive and underpenetrated market that is supply chain finance,” says Monica Brand Engel, co-founder and managing partner at Quona

The financing will be used to accelerate Twinco’s expansion in the key markets that Western retailers tend to source from, as well as to strengthen its technology and data capabilities, particularly in regards to environment, social and governance (ESG) data. Twinco also has plans to agree a $100 million debt facility during the first quarter of the year.


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