C2FO would’ve been profitable in the US alone, CEO says; how solving for global needs made it an even stronger fintech leader 

The impact of one Kansas City-built fintech company is being felt far beyond the borders of the U.S., said Sandy Kemper, detailing how C2FO’s strategy to go global is creating hundreds of thousands of new jobs for small businesses across the world.

“It’s somewhat ironic that we got our start in what is probably the best banking system in the world — and there’s a huge demand for what we do in the United States — but the need is much greater elsewhere,” said Kemper, founder and CEO of C2FO. “We’re talking four to five times greater than what we see in the United States.”

The Leawood-based company — an on-demand working capital platform, providing fast, flexible and equitable access to low-cost capital to businesses worldwide — recently was lauded with a global honor: the SME Financier of the Year-North America Award by the SME Finance Forum managed by the International Finance Corporation (IFC), a member of the World Bank Group.

“This is an indication that the World Bank, the IFC, and other entities are understanding that we’re not going to solve this liquidity problem if we apply the same historical thinking on how we get banks to loan money,” said Kemper.

“There have to be new systems of delivery, and there are lots of ways that you can create more liquidity in the market,” he continued. “You can always lend more money, for example — but the problem is it’s just throwing new resources at an old platform; it’s not structurally able to meet the needs of the SMEs (small and medium-sized enterprises).”

The Global SME Finance Awards — organized in September in São Paulo, Brazil — recognize and celebrate the outstanding achievements of financial service providers in growing SME finance. Entries were evaluated based on portfolio growth in serving SMEs over several years, as well as the development of specific products, services and value-added solutions for SMEs. 

“C2FO’s working capital solution creates a marketplace for capital with the transparency, flexibility and immediacy that SMEs need,” said Qamar Saleem, global head of the SME Finance Forum. “They are one of the standout members of the SME Finance Forum with so much potential to change the way we think about working capital finance for SMEs.”

More capital flow for SMEs

To date, C2FO has funded more than $370 billion globally in business financing. In 2023 alone, C2FO secured tens of billions of dollars of working capital to help them grow, according to the company. Additionally, $5.4 billion of the total supplier funding last year was specifically to minority and women-owned businesses on the platform. 

Those figures become even more significant, Kemper said, when considering the impact of capital access on new jobs.

“For every million dollars that you put into the hands of a small or mid-sized business, 16.3 jobs are created,” he said. “Small business is about half the GDP of the world. So that means there’s about $20 trillion of accounts receivable on the books of those small businesses on any given day. If you could just solve half of it through all sorts of different mechanisms — whether it’s platforms like ours, exchanges or additional new solutions we haven’t thought of yet — that would mean getting $10 trillion into the hands of small businesses around the world. That’s 160 million net new jobs.”

“The No. 1 thing that small businesses tell us is that the biggest gating factor to their growth is access to capital,” Kemper added.

And in countries like Nigeria, Indonesia, and Brazil where community and regional banks don’t commonly exist — and the few available big banks don’t have time for small businesses, he said — there’s an opening for companies like C2FO to create opportunities.

In May, C2FO became the first U.S.-based fintech company to launch a national funding platform for micro, small and medium-sized enterprises in India, where small businesses employ about 65 percent of the population, Kemper said.

“India, in particular, is an extraordinary country; it’s a global leader and is only going to increase its global leadership,” said Kemper. “They have a wonderful population and rising birth rate; that means a lot of young people who need jobs. In fact, they need 100 million new jobs created between now and 2030. The only way you’re going to do that is by creating more capital flow for small businesses.”

Sandy Kemper, founder and CEO of C2FO, center right, participates in a panel conversation at the 2024 SME Finance Forum alongside Makiko Toyoda, global head of the global trade finance and global supply chain finance programs for the International Finance Corporation (IFC), a member of the World Bank Group; photo courtesy of C2FO

This could change everything

External validation from prominent financial institutions and the SME Finance Forum show C2FO’s global strategy was the right move for its Kansas City-based team, Kemper said.

“This truly is a recognition of the global platform that we’ve created,” he said. “Sixty percent of our revenue comes to us in dollars, but 40 percent is non-dollar denominated. And the same with our funding and our flows. To be recognized by a global organization like the World Bank and IFC for providing great solutions for the SME world is really meaningful to us because from Day 1 we endeavored to build a solution that is global and that’s how we approach the problem.”

It wasn’t always the most obvious or popular strategy, he admitted, acknowledging the longer runway and heftier buildout for such a solution.

“Sometimes we’re celebrated for building a global platform, and sometimes … well, we’re not,” Kemper said, with a laugh. “We’ve put close to 450,000 small businesses on the platform. Every one of them needed some degree of care, so there’s a cost to onboard all of those businesses. You have the global costs to build a platform that can manage the VAT — the tax regimes, the polices across all of these various countries — but on top of that, you have the need to build critical mass of those businesses.”

“So we spent a lot of money to build a global platform and we raised a lot of money to get it done,” he continued. “We could have been maybe a little bit smaller, and a little bit more profitable had we only focused on the United States. But the need is global. And our job is to step into that vacuum and create a system that delivers capital more effectively than previous systems.”

While C2FO is still small, he said, the support of organizations like the World Bank and the IFC could help the homegrown company go from arming small businesses with $100 billion in capital to $1 trillion.

“And when we get it to a trillion, then maybe we’ve got something that changes the way the system works forever,” Kemper said. “But it’s still a long way to go and hard as hell to get there.”