Our Managing Director and CEO Dr. Daniel Steinke in an interview with Hannah Schmitz from the Braunschweiger Zeitung. The article appeared in the business section of the Braunschweiger Zeitung on 11.01.2023.
Click here for the german PDF version of the interview.
JITpay fills a market gap in the industry – and aims to turn over billions soon
Brunswick. When we meet for a talk shortly before Christmas, it is not quite clear whether it is to take place on the tenth or eleventh floor of the BraWo office tower in Braunschweig. JITpay has just moved into the eleventh floor of the high-rise building near the main station. This spatial enlargement symbolizes the enormous growth that the start-up from Braunschweig is experiencing. The financial services provider generated sales of around 200 million euros in 2022, only its third operating year, more than tripling its revenue year-on-year.
In just a few years, in 2026, sales are expected to break the billion mark. “We set out to generate five billion euros in revenue,” says Daniel Steinke, founder and CEO of JITpay. At the conference table on the eleventh floor, with a sweeping view over the city, you briefly wonder if you’ve misheard. But no: “The market is big,” explains the 49-year-old. And the market obviously has a huge need for it, too. Until now, hardly any service providers have taken care of the small “trucker companies,” as Steinke calls them.
Lax payment practices
The financial services provider organizes and digitizes the billing process between small and medium-sized transport companies and their clients. About 85 percent of trucking companies have only small fleets with a maximum of up to ten trucks, Steinke reports. 27 percent even have only one truck. These companies are often family businesses in which the man himself sits on the “buck” while the woman does the bookkeeping in the office. Sometimes the son or another employee is also in the business.
“We want to be their digital commercial leader,” Steinke explains. Because: “They are truckers, and not merchants,” says the JITpay boss. In other words, many of them often worked in analog mode, with paper and mail, or sent out invoices with a time delay. On the other hand, these small businesses would have to deal with large freight forwarders as customers, who would take every opportunity to pay later. “With a 30-day payment term, on average, people don’t get paid until 45 to 60 days later,” Steinke says. For the small companies that have to prefinance diesel and tolls, it’s a big burden. “Our start-up solves a real problem,” Steinke is convinced.
JITpay, on the other hand, pays trucking companies half of future revenues once they upload their order certificate to the service provider’s database – which they can use to pay for fuel fill-ups, for example. The transport companies will receive the rest once they have uploaded a photo or scan of the delivery receipt. According to Steinke, clients used to request the originals of such documents by mail – which costs time and therefore money. With prefunding, Steinke believes the entire trucking profession will become more attractive. “More people can start their own business – all they need is a job,” he says.
On the other hand, JITpay grants flexible payment terms to the customers, i.e. forwarding companies such as Schenker or Dachser. However: “We have a tight accounts receivable management and, if necessary, we also take care of original documents or send reminders for payments,” says Steinke. As a Bafin-regulated financial institution with trade credit insurance “on the back end,” the Braunschweig start-up would basically get paid reliably and faster than the small trucking company with no market power.
We are not talking about huge sums here: An average ticket size is 650 euros, JITpay charges a 1.99 percent fee for its service with a payment term of 30 days – i.e. 12.94 euros for an order value of 650 euros. Last year, JITpay said it purchased 150,000 invoices, behind which would be about 9000 trucks. JITpay obtains the money to pre-finance the invoices on the capital market, where it securitizes its receivables.
And the customer base is growing and growing: Most recently, the service provider acquired 100 new customers per month, and this year it is aiming for 250 new customers per month. Currently, the customer base includes about 2000 businesses — three-quarters of which Jitpay has acquired in the past year. Accordingly, the start-up is also building up its own workforce – it doubled to 100 employees in 2022 and is set to grow further.
Volksbank BraWo is invested
Steinke, who describes himself as a “logistician through and through,” talks enthusiastically about this development. The 49-year-old from Braunschweig founded the company in 2016, Dennis Wallenda has been on board since 2018, and last year Manuel Faeh joined as co-managing director. In 2018, the start-up also received the factoring license required for its business model, and in the same year Volksbank Braunschweig-Wolfsburg, under Chairman Jürgen Brinkmann, invested 5 million euros, securing a 25.1 percent stake in the business.
According to the Frankfurt-based “Platow-Brief”, Brinkmann thus proved “once again his good nose for non-bank business”. Steinke recalls, “It was a mega-success at the time.” Steinke himself resigned from his management mandate at the Braunschweig-based logistics consultancy HDS Consulting in 2019, as reported by the “Deutsche Verkehrszeitung” – and has since focused exclusively on JITpay.
EUROWAG buys in
In 2020, the Corona pandemic caught the young company cold – as it did so many others. The management decided to take an unconventional approach with the start-up. “We advertised ourselves in all the associations and offered 30-day interim financing for 0.99 percent. That went like hot cakes,” reports Steinke. The “pulling together” paid off: After three years of development work, the company generated sales of around 30 million euros in its first operating fiscal year 2020. Since then, things have gone steeply uphill.
In 2021, JITpay entered into a cooperation with TIMOCOM, one of the European market leaders in freight and cargo space exchange. This gave the start-up access to many new potential customers.
Last year, in September, Eurowag, a mobility services provider listed on the London Stock Exchange, bought a 9.9 percent stake in the financial services provider, whose enterprise value at the time was “well into the triple-digit millions”. For JITpay, this is “the next growth step on the way to becoming the leading, digital billing and payment service provider for the medium-sized logistics industry in Europe,” according to the statement. Together, the strategic partners want to build an entire digital ecosystem for transportation companies. One year earlier, in 2021, Volksbank BraWo had once again increased its share capital. The anchor investor now still holds more than 20 percent of JITpay.
The Braunschweig-based company already has locations in Switzerland, Poland and Romania and plans to penetrate further into southern Europe, with JITpay planning to open a location in Spain, for example. The payment service provider wants to be “the good partner of truckers,” says founder Steinke, emphasizing, “We’re not the grasshopper.”
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