HSBC & Tradeshift Launch SemFi to Transform Business Finance

HSBC has unveiled SemFi by HSBC, a new venture designed to revolutionise how businesses handle finance. A joint effort with global B2B trade network Tradeshift, SemFi aims to deliver seamless embedded finance solutions to companies across a variety of e-commerce platforms.

Initially launching in the UK, SemFi will embed HSBC’s payment, trade and financing options into online marketplaces, starting with Tradeshift’s own B2B network.

The goal is to help small and medium-sized enterprises (SMEs) access critical financial services, such as digital invoice financing, through a streamlined process. HSBC’s virtual card solutions will also provide businesses with enhanced flexibility and security in managing expenses.

Meeting business needs in a digital world

“Businesses are increasingly looking for seamless financial solutions that are embedded within their e-commerce journeys, so they can access these when and where they need them,” explained Vinay Mendonca, SemFi’s CEO.

Mendonca went on to stress that SemFi is positioned to meet those demands by integrating HSBC’s financial capabilities directly into the platforms businesses are already using.

“SemFi by HSBC aims to deliver such embedded capabilities to help businesses grow. It will seek to bring the best of both worlds to our business customers and e-commerce partners; a start-up technology mindset coupled with the global scale and expertise, of an international bank.”

SemFi is backed by a leadership team drawn from HSBC’s senior ranks. Alongside CEO Vinay Mendonca is Shehan Silva, who has taken on the role of Chief Operating Officer (COO).

Both will report to Jo Miyake, Interim CEO of Global Commercial Banking at HSBC, who also joins the SemFi board.

Why embedded finance matters

HSBC’s move into embedded finance is part of a broader strategy to keep pace with changing business needs. Companies, particularly SMEs, are looking for more integrated financial solutions as e-commerce continues to grow.

Embedded finance streamlines financial processes, reducing friction and allowing companies to access financing and manage payments within the platforms they already use to do business.

The global embedded finance market is valued at US$82.48bn in 2023 and is expected to grow by 35% annually over the next five years.

By partnering with Tradeshift, a company that processes US$260bn in gross merchandise value annually, HSBC is positioning itself at the forefront of this rapidly expanding sector.

James Stirk, CEO at Tradeshift, described the move as a "major milestone for the future of trade finance!"

"Semfi from HSBC (derived from seamless, embedded finance) will embed HSBC payment, trade and financing solutions across a range of e-commerce and marketplace venues, including Tradeshift’s own B2B Network.

"This marks a transformative step in Tradeshift’s ability to deliver vital, value-adding services to our network, tackling a key challenge for businesses: access to liquidity, cash flow management and seamless financial integration within supply chains.

"With Semfi now in the mix, we’re ready to rapidly scale to meet the demand for these services across a broad range of businesses."

What’s next for SemFi?

Although SemFi will launch first in the UK, HSBC plans to expand the service globally over time. The venture is designed to operate as a technology company rather than a traditional bank.

Clients will be onboarded by HSBC, and the bank’s balance sheet will be used for financing, but the goal is to offer a tech-forward solution that meets the evolving demands of businesses worldwide.

With HSBC supporting 1.3 million businesses globally and facilitating more than US$800bn of trade each year, SemFi is set to become a key player in the world of embedded finance. For SMEs, the ability to access HSBC’s services seamlessly within their e-commerce workflows could represent a significant step forward in efficiency and growth.

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