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Stenn, a London-based invoice financing provider, was put into administration on Wednesday, 4 December after an application by HSBC Innovation Bank, the UK banking giant’s startup investment wing.
Following an order from the London High Court of Justice, three managing directors from Interpath Advisory, a consulting and restructuring firm, will take over as administrators of Stenn and Stenn Assets UK, its funding vehicle.
In a statement on the Stenn website, the administrators said their immediate focus would be to “engage with the companies’ key stakeholders in order to stabilise the companies’ operations”; debtors should continue to fulfil their payment obligations “in the usual way” in the meantime, but the company would not fulfil any additional lending requests.
The application to put Stenn in administration was filed by HSBC Innovation Bank, which acted as a security agent on a revolving credit facility Stenn had initially signed with Silicon Valley Bank UK and was then taken over by HSBC. Companies are usually put in administration when they are close to financial collapse and need to avoid insolvency; however, a Stenn spokesperson attributed it to a “sudden action by an investor” and said it was “actively defending” against it.
Stenn’s mission to increase access to trade finance by targeting smaller, underprovided firms had seen it deploy almost £8 billion to companies in 70 countries and expand in the US, Spain, and China. Since its founding in 2015, the company has featured in the Financial Times and CNBC as one of Europe’s fastest-growing fintechs and reached a valuation of £700 million in 2022, with past investments from Barclays, Natixis, and Crayhill Capital Management.
Stenn’s fast rise and just as drastic fall could point to a trend of fintech floundering as venture capital investment dries up; similar start-ups Manigo, Bink, and Divido were all placed under administration in the past few months.
Stenn’s goal of increasing access to trade finance played an important role in decreasing the trade finance gap and democratising access to trade; however, dealing with small and medium enterprises entails more uncertainty and risk, which compounded by the inherent complexity of trade finance can make it difficult for financing providers to flourish.
