Samantha Herrick:
Welcome to the Tech Optimist, the podcast that champions big ideas and bold thinkers shaping the world of tomorrow. I'm your host, Samantha Herrick, and every episode, we dive into the cutting edge innovations redefining industry, communities, and our everyday lives. Today, we're exploring a game-changing B2B marketplace startup that's redefining how businesses connect and collaborate. Imagine a platform that takes the complexity out of sourcing, streamlining transactions, and empowers industries to operate at peak efficiency. Intrigued? Let's dive into their vision and meet the innovators behind it.

Andreas Mjelde:
But best of luck going to your local bank and explaining that this new robotic solution is worth for you to get a special financing deal for. That's where we come in. We work with those companies. We build a frame agreement that allows them to offer financing through installment, purchasing plans in a matter of second.

Samantha Herrick:
That is Andreas Mjelde, co-founder and CEO of our special startup company today, Two.

Laura Rippy:
Two comes in, professionalizes this critical financing step for B2B companies, and enables them to focus on what they do best and you take care of the financing piece, and really the partnership is amazing.

Samantha Herrick:
Longtime listeners of the show know that voice. That is Laura Rippy, the guide, and Andreas' counterpart for this episode. Oh, yeah, and internally, she's a managing partner and board member at Alumni Ventures.
If you're a new listener to the show, you might be wondering who I am. I am your host, Samantha Herrick, and I'm excited to be here guiding you through today's conversation. So as both the host and producer, I'll be in the background adding key insights and information throughout the show. Think of me like a fly on the wall, helping bring clarity and deeper understanding to key topics our guests are going to discuss today. Today's episode features Andreas and Laura. I'll be jumping in at key moments to add context, dive deeper into the conversation and ensure we cover all the important details.
What if business payments could be as simple and seamless as buying a pair of shoes online? That's the bold promise of our guest company today, Two, a FinTech powerhouse founded in 2020 by Andreas Mjelde, our guest today. Two is forming the B2B payments landscape with its groundbreaking buy now pay later solution for businesses offering instant interest-free trade credit that's setting new standards in global commerce.
With $19.3 million in Series A funding from heavyweights, like Shine Capital, Antler, and Sequoia, Two is scaling at lightning speed, boasting a staggering 243% quarterly growth across the Nordics and the UK, and a growing footprint in Europe and North America.
Their cutting-edge platform combines rapid credit underwriting, fraud detection, and intuitive receivables management to empower nearly 200 active merchants to operate faster and smarter. And with their headquarters in Oslo and a sharp driven team of 70, Two is proving why they were crowned the 2023 Nordic FinTech Award winner for Growth. Wow, what a name for that award, huh?
This is a company that's not waiting for the future. They are the ones building it. Stick around as we dive into Two's journey, their ambitious vision, and how they're making waves in the FinTech space. You know what to do. You know the drill. Ad, disclaimer coming right at you, and then we'll hop right into the interview when Laura will take us away. All right. Hang tight. Let's do this.

Laura Rippy:
Hey, everyone. Taking a quick break to share more about the Yard Ventures. Yard Adventures is a venture capital fund built for the Harvard community with 20 to 30 investments, intentionally diversified by sector, stage, and geography, and co-invested alongside renowned lead VC investors. We leverage our presence in the robust startup ecosystems surrounding Harvard University to secure access to high velocity startups.
Yard Ventures nests within Alumni Ventures, one of the most active and top performing VC firms in the US and one of the only firms focused on making venture capital accessible to individual accredited investors like you. So if you'd like to learn more about the Yard and the opportunity to bring venture capital into your portfolio, visit us at av.vc/yard. Hope you join us.

Samantha Herrick:
As a reminder, the Tech Optimist podcast is for the informational purposes only. It is not personalized advice, and it is not an offer to buy or sell securities. For additional important details, please see the text description accompanying this episode.

Laura Rippy:
Hey, everyone, it's Laura Bordewieck Rippy. I am managing partner at Alumni Ventures and thrilled to be here with Andreas Mjelde, who is the CEO of Two. We've been investors for a while and wanted to share more about the company and where they're growing and ways that you might be able to be helpful. So, let's kick it off. Everyone loves a good elevator pitch. What is yours, Andreas?

Andreas Mjelde:
First of all, thanks a lot for having me here and for investing in our business. Two simplifies B2B ecommerce. We make it easy to sell on net terms for a business that's selling to other businesses, as it is for consumer-oriented business to sell on cards. The seller will paid out the next day as if it was a card transaction, while we make sure that the customer is not fraudulent. We do the credit underwriting of the customer and take care of the payment process on the backend. All in all, it becomes... You can put B2B payments on autopilot but still offer the various kind of net terms payments that businesses prefer and want when they purchase on behalf of the business.

Laura Rippy:
Great. Let's double click on a little bit of that. Imagine that you are talking to a customer. What does that customer look like, and how do you really make the story come to life for them?

Andreas Mjelde:
A typical customer for ours will be... It can start as a scale up size, so it can be a relatively young business but growing fast, and it can grow all the way into the enterprise segment. The common factors for them is that they're predominantly selling to other businesses, and they're selling products or services that often are in the typical range of from $1,000 and up to $100,000. In this range, 95% of all businesses prefer to purchase on net terms. It's a couple of reasons for that. You have the obvious one, capital relief, because you're not paying at the moment of purchase, but maybe 14, 30, 45 days later. So, the CFO is going to love it, because this improves his or her working capital.
There's also other reasons for efficiency purposes. For instance, the accountant at that purchasing business tends to want to purchase an invoice because they're certain that they gotten all the documents in need for filing the accounts. So when you're in that range, that's typically highly preferred. This can [inaudible 00:07:42] the operation of many different industries. It can be related to HoReCa, so hotels, catering, restaurants, restocking all the purchases and literally the salad, the meat, and the beverages they're going to sell for their restaurants. It can also be a services-oriented business, buying new computers for their employees. So, it's a broad set of application, but typically work a lot with services industries, lots of HoReCa, and also a lot of the construction and automotive industries.

Samantha Herrick:
All right. Sam here. I'm butting in a little early, but let's level the playing field a bit. Let's talk about the quiet revolution, which is reshaping the business world, which is B2B ecommerce. At its core, this is about businesses buying and selling from another one online. Think about manufacturers dealing directly with wholesalers or retailers placing bulk orders, all happening on sleek digital platforms that have replaced chunky manual processes that are unorganized and just they don't really fit well within the landscape of all the technology and innovation that we have surrounding by us today.
It's a space where efficiency reigns supreme. These platforms streamline procurement, they cut down on overhead, and they offer tailor-made features like bulk pricing and customized catalogs. And it's massive. The US B2B ecommerce market alone is worth $2.5 trillion, accounting for 14% of all B2B sales. So, unlike B2C where speed and impulse buys are king, B2B focuses on long-term partnerships and larger, more deliberate transactions. Industry giants like Alibaba and Amazon businesses are leading the charge, but niche platforms are carving out spaces too, revolutionizing how businesses operate and connect.
This is where Two comes in. Two is revolutionizing that process from the business to business transaction. Let's let them get into it a little bit more here.

Laura Rippy:
Remember, you're actually helping one of our other Alumni Ventures portfolio companies in the robotics space. It's a secret deal, so we can't share which one. But I think when we talked about it, it sort of fit a lot of what you're discussing in terms of price point and the help that you can provide to a company, that robotics as a service is an element of what you're doing going forward and I think an interesting growth area.

Andreas Mjelde:
Yeah. We love it. It's a new vertical for us, but we love it. I mean, there's just so much activity going on in that space, and more and more businesses who've been developing great products for two, five or even longer period of time are now coming to market and with great momentum. But my comment for all of them is that the customer on the opposite end is not going to make a purchase that's somewhat larger than what you do on a day-to-day basis. It could be a 20,000 purchase, it could be 100 or maybe even $200,000.
You would like to get that financed because most of the purchasing you do for your business, you do want to have some kind of financing plan to it. But best of luck going to your local bank and explaining that this new robotics solution is for you to get a special financing deal for. So, that's where we come in. We work with those companies. We build a frame agreement that allows them to offer financing through installment purchasing plans in a matter of seconds, even if the purchase is for 200,000 robotics solution that will span two, three, four years.

Laura Rippy:
Amazing. And overall, market size is a huge opportunity, right? I mean, how do you frame it from an overall perspective of the market opportunity?

Andreas Mjelde:
Yeah. I mean, leaving the robotics aside, which is a very growing market, a bit hard to estimate the size of, the total B2B payments market is probably as big or bigger than the total credit card market across the globe. So, we're looking at payments volumes in the range of 20 to 30 trillion that is relevant and addressable for net terms. But today, most of these payments are actually being managed by the business themselves, which takes a huge toll on the business and need to build up credit capabilities, have their working capital in place, manage counterparty risk and so on internal. So despite being such a big market, it's still more or less a great field.

Laura Rippy:
But Two comes in, professionalizes this critical financing step for B2B companies, and enables them to focus on what they do best and you take care of the financing piece, and really the partnership is amazing. Are there any customers in particular where that's really resonated over the years, where there's been those ties that you can see how you've been able to help them grow their business?

Andreas Mjelde:
Yeah, I would say there's many. We can start with one example in the HoReCa space. We work a lot with a business called REKKI, which is a platform that connects lots of suppliers of food into the HoReCa industry. And basically, the challenge for any supplier that... Let's say you are a fresh produce supplier outside London, and you want to offer your fresh produce to the restaurant scene in London. There's going to be about 10,000 restaurants or so that could become your customer. Most of these are small, medium-sized businesses. They're hard to really underwrite, hard to really understand, and you definitely can't go and visit every single one of them yourself.
Together with REKKI, we built out solution that allows all of these suppliers across UK to now accept any restaurant across UK in a matter of seconds on net terms. Effectively, we can expand the reach of not only the big businesses, but also small, medium-sized businesses who want to reach more businesses. And we can do that fully automated where they, instead of making decision over maybe a period of a week, can now onboard and accept that customer in a matter of two to 10 seconds.

Laura Rippy:
It really feels like you have almost a network effect. Is that correct?

Andreas Mjelde:
Yes, absolutely. I mean, on the back end of our platform, where at the core what we do, we're making a risk decision on the counterparty in the transaction. B2B payments or net terms, it's not complicated because of the capital component of it, and definitely not for the money transfer. There are just so many good methods or ways you can transfer money from one business to another today. What's really, really, really hard is to know which businesses can you trust and is representative, even a representative of the business itself.
Effectively, at the core that we build, we build risk engines. Those two risk engines are split into three main parts. The first one is making a decision on whether or not a counterparty is representative of the business they claim to represent. The second one is whether the business is legit. There are so many businesses out there whose sole purpose is to do fraud, to obtain credit lines and go bankrupt at some point in time, and they've tapped into as much cashes and credits as they possibly can. And the third decision is a credit decision.
All of these engines are engines that we build in internally, and the more customers, the more transaction we pass through, the better we become at helping our clients manage credit risk and fraud. So, there's a huge network effect that compounds as you gain customers, gain transactions, and start expanding across markets.

Laura Rippy:
I love that. You must have some very happy CFOs in your customers.

Andreas Mjelde:
Absolutely. I mean, I think the CFOs are typically seeing that a solution like ours can make them network and capital negative immediately, which is for many CFOs, one of their main KPIs. I would say that the person that tends to be the most happy is the head of sales or the head of ecommerce sales, because there's a typical friction point. Anyone who's running a B2B-oriented business, anyone who's been head of sales for B2B organization or even a CFO knows the common friction point. The sales has a new customer, it's a great lead, can help them capture more volume. Or you've expanded into the ecommerce channel where you can get access to tons of new customers, but these customers are not being approved by the other side of the business who's managing the risk and the net terms.
The other side of the business is sitting there and seeing more customers coming in, more tension, more pressure to make faster decisions, pressure to increase the credit line so that the sales team can meet their targets. And when you plug in our solution, this goes on autopilot. The company no longer have to make these risk decisions. We make them in three seconds, and we take the fraud and credit risk, so this is no longer something that's in scope. You can focus on what you do best, which is to deliver a great product or service.

Laura Rippy:
That's fantastic. You're taking the friction out of the sales process, you're giving comfort to the CFO that these decisions, these financing decisions are made with experts, with professionalism taking into the three levels of risk that you consider and are solving here. So, that's a pretty powerful solution, Andreas. Congratulations on all that you've built.

Samantha Herrick:
Running a restaurant is no walk in the park. Long hours, countless challenges, and relentless pressure are the ingredients that go into creating seamless dining experiences. Trust me, I know. My dad runs a restaurant at home, and it's insane how much work I think you have to have to keep that business afloat and keep all of your employees afloat. That's a reality. REKKI CEO Ronan Givon knows all too well, having spent over a decade running restaurants in London with a deep understanding of these struggles. Ronan founded REKKI, a B2B marketplace app that connects thousands of restaurants across the UK and the US with local suppliers, streamlining the chaos of sourcing ingredients and managing orders.
But even with REKKI's streamlined system, there was one major hurdle. Restaurants placing multiple orders a month led to a mountain of invoices, each with different payment deadlines. Enter Two. By integrating Two's trade account and grouped invoice feature, REKKI is able to consolidate 13 monthly invoices into just one, saving time and reducing admin headaches for both chefs and the suppliers. Ronan calls this a game changer, saying, "Our customers are voting with their wallets and choosing 30-day payment terms over other options. Two has removed so much friction from the purchasing process."
And Two didn't stop there. They customized their solution to fit REKKI's needs, becoming true partners in simplifying B2B transactions for the food industry. Looking ahead, REKKI is set to scale its impact with Two powering its growth. This partnership is proof that innovation isn't just about technology, but it's about understanding and solving real-world problems.
Running a business in the automotive industry isn't just about parts and repairs. It's about precision, trust, and seamless service. That's exactly what sets Bildeler apart. With over 30 years in Norway's car parts market, this company has mastered the art of connecting customers with exactly what they need. From brakes to suspension, all thanks to their innovative registration number search feature. But here's the twist. Bildeler didn't stop at B2C sales. They recently entered the B2B market, targeting workshops and repair businesses. While demand soared, so did the complexity of managing credit assessments and billing internally, a bottleneck which slowed their growth.
Enter again Two. With Two's guest checkout solution and credit assessment technology, Bildeler achieved a 96% acceptance rate for B2B customers. By streamlining the payment journey and offering flexible credit, they supercharged their operations and boosted sales sustainably. This story is proof that innovation paired with the right partnerships can revolutionize industries.
Two's platform seamlessly integrates with your existing sales channels, whether it's ecommerce, phone orders, or in-person transactions. When a customer makes a purchase, Two's AI-powered risk engines, Delphi and Frida, assess credit worthiness and fraud risk in less than two seconds, ensuring instant credit decisions. Approved buyers are offered flexible payment terms, 14, 30, 60, or 90 days given in the flexibility to delay payments while merchants receive full upfront payment, improving their cash flow.
It doesn't stop there. Two takes care of invoicing, reminders, and dunning processes, reducing admin work for these merchants. And with real-time credit risk management, merchants still maintain control over credit approvals and buyer management. So with multi-currency support, Two enables international transactions, giving merchants the ability to grow globally without the typical payment headaches. Two is transforming B2B sales, we already know that, but they're doing it with simplicity and speed. I wanted to provide some more info on their technology and how it works.
In the next few minutes here, Laura is going to let Andreas take it away with their ask for the AV community and for the podcast community. But before that, we're going to wrap this up with our last ad for the show, and then we'll hop back into the interview with Laura.

Speaker 4:
Do you have a venture capital portfolio of cutting edge startups. Without one, you could be missing out on enormous value creation and a more diversified personal portfolio. Alumni Ventures, ranked a top 20 VC firm by CB Insights, is the leading VC firm for individual investors. Believe in investing in innovation? Visit av.vc/foundation to get started.

Laura Rippy:
I want to make sure that we give you a chance for an ask. Now, normally, I ask this question and what ask would you have of the Alumni Ventures community. But given that you also work with startups, let's take that in two tiers. What ask would you have for the 1,400 portfolio companies that we have in the Alumni Ventures family? And then, what ask would you have in the broader community of the Tech Optimist and Alumni Ventures listening world.

Andreas Mjelde:
Yeah. The ask, I have two asks. So, increasing in Two is becoming a network, where we bring in banks and they empower those banks offer in net terms to their business customers. And this is becoming more and more powerful the more banks we bring in that have different regional or conflict coverage, that combined, we're increasingly making net terms, something that any business can take for granted and offer to their customers anywhere in the world. So if you are one of those banks or if you know a bank that increasingly are interested in providing a good value add in terms of net terms payments or B2B payments with a customer base, get in touch.
And the second one, we see an incredible interest from companies with larger SaaS contracts or robotics contracts or types of services. If you're building one of those companies or if you know of a business that now are going to market and starting to face those challenges of offering financing and underwriting and approving new customers, get in touch and let us help them grow as fast as they possibly can.

Samantha Herrick:
So, if you feel that you can help out too in their future endeavors, feel free to hop over to their website and connect at www dot T-W-O dot inc, I-N-C. So, www dot T-W-O dot I-N-C or inc. Now, you can also connect with Andreas Mjelde on LinkedIn. And so, if you think you can help them out with either of those asks, please feel free to connect and say hello.

Laura Rippy:
Andreas, share your business model with our folks. How do you make money?

Andreas Mjelde:
Yeah. At the core of it, we are a payment solution, where we take a take [inaudible 00:24:03] on transaction quite similar to most of the payment methods. That's how we started out the business and have grown up until now. What we're really building is building a network where we can connect as many banks as need be to have a global coverage, where we and our bank partners combined can go out and offer net terms to any business selling to other businesses around the globe.
Effectively, what that means is that it's not only the seller that can plug into our solution through our API and offer net terms to their customers. In fact, we also have an API for banks where they can connect to us. And through that, they'll have a complete solution that they now can go out to their customer base of businesses who sells the businesses and would like to streamline and automate this service.
Increasingly, the business model is shifting from a business model where we are serving the seller in the B2B transaction, to actually serving the financial institutions who would like, but up until now, haven't been capable of being there at the point of transaction and helping the seller make those sales happen. And with that in mind, I mean, the business model actually is shifting gradually, and it's starting to look a bit more like maybe what Visa is doing relative to another payment company like Stripe or [inaudible 00:25:24], where we are enabling the banks to finally offer net terms as a service to their customers.

Laura Rippy:
Net terms as a service to their customers. This is so compelling, Andreas. Is there anything more about this network that you're building that we need to know?

Andreas Mjelde:
Yeah. Since short, this is a network where banks can connect with us and they can both, through that network, offer net terms to all their business customers. But they can also engage in transactions where they can actually cooperate with banks, quite similar to you doing a card transaction where you have an issuing bank and an acquiring bank of any given transaction. The opportunity of net terms is enormous. We're looking at 20 to 30 trillion of payment volumes that's currently being relevant for B2B net terms offerings. And this could be an opportunity for the banks quite similar to what credit cards has been on the consumer side for the last 60 years.

Laura Rippy:
That's a brilliant vision, Andreas.

Andreas Mjelde:
Thank you.

Samantha Herrick:
Thanks again for tuning into the Tech Optimist. If you enjoyed this episode, we'd really appreciate it if you'd give us a rating on whichever podcast app you're using, and remember to subscribe to keep up with each episode. The Tech Optimist welcomes any questions, comments, or segment suggestions. So please email us at info@techoptimist.vc with any of those, and be sure to visit our website at av.vc. As always, keep building.