MTS together with the international venture capital firm Digital Horizon announce the acquisition by MTS of 51% of the equity capital of Factorin LLC for RUB 867 m, including a RUB 350 m cash-in investment to support the startup’s continued development. Factorin is the developer and owner of an innovative blockchain-based platform for trade finance transactions with a focus on supply chain finance and invoice factoring. The acquisition is aimed at expanding MTS Group’s portfolio of digital financial services for B2B clients.
Factorin’s innovative platform provides a comprehensive solution for supply chain financing by digitizing financial interactions between buyers, suppliers, and banks. The platform provides factoring and other trade finance services for leading Russian retailers and their suppliers, including Magnit (Tander JSC) and Dixy Group as well as MTS’s own retail network (RTC).
Ilya Filatov, MTS VP for Financial Services and MTS Bank CEO, commented: “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.”
Alan Vaksman, Co-Founder and Managing Partner at Digital Horizon, stated: “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. Factorin is one of the pioneers that are helping to bring that future into today’s business. Factorin’s blockchain technology solves real business problems, while processing millions of transactions in a highly secure and confidentiality-focused environment. I am pleased that MTS shares this vision with us and embarked on the strategic journey to support the rapid growth of this asset.”
Andrei Maklin, Factorin Co-Founder & CEO, said: “Factorin is leveraging the latest innovations to not only offer our customers a full spectrum of advanced trade financing solutions, but also launch fundamentally new products that would be impossible to build using traditional technologies. For example, we are enabling corporate clients to set up their own platforms that provide their suppliers and buyers with attractive offers from a variety of financing providers. In just two years — with the support of Digital Horizon — we have built the largest trade finance platform in Russia. With this deal, we are adding the resources of a powerful partner in order to help meet growing market demand as well as unlock additional opportunities and competitive advantages for our users. Combining MTS’s scale and expertise with Factorin’s blockchain solutions will help us qualitatively transform fintech services for the Russian B2B segment.”
In addition, MTS has concluded an option agreement providing for the Company to retain a call option to acquire the remaining equity in Factorin from the startup’s founders in the future. Prior to closure, the deal received all necessary corporate approvals.
Factorin is transforming the Russian trade finance industry with the help of blockchain technology and innovative financial products for factoring, supply chain finance, and dynamic discounting. Factorin was included in a WTO report on global projects in blockchain trade finance and distributed ledger technology (DLT), and was named by Visa as one of the top-20 leading fintech startups in Russia. Since its launch in 2019, Factorin has helped finance more than 1.6 million delivery invoices worth some 225 billion rubles, with a network of 59 nodes that have processed around 4.4 million total transactions.