For most entrepreneurs, profitability is the main goal.
However, for Nicola Weedall, founder and CEO of Hydr, it’s not just about that – but rather, taking the business ‘to the next level’.
The Manchester-based FinTech provides invoice finance specifically designed for very small businesses, a segment often overlooked by traditional lenders.
Weedall previously spent 10 years as UK lending service and delivery manager at GE Capital before founding Hydr in 2020 after seeing a lack of options to improve cashflow for businesses turning over less than £3m.
Her company aims to change that, and she’s clear on what it will take to grow.
“If we want to take the business to the next level, we’ll need to do that with investment,” she tells BusinessCloud in Lisbon, where she’s attending her first Web Summit.
“If we just want to reach profitability, we can do that without it, but that’s not very aspirational.”
Ready to scale
Weedall spoke at BusinessCloud FUEL Manchester event in October, revealing how they’re now paying out an average of £1m a month.
What makes the figure remarkable is the average invoice size is £2,500 and they have virtually no bad debt.
Weedall has achieved all this with a team of four people – two of them part-time – but the FinTech has already proven its model and its technology.
The challenge now is scaling up rather than just surviving.
She continues: “We’ve proven the concept and now we want to take the business to the next level.”
The company is backed by a pool of angel investors and has reached a stage where organic growth alone won’t deliver the kind of expansion that straight-talking Weedall wants
She says funding will allow the company to strengthen its team, boost product development and expand its lending capabilities, whilst also signalling maturity to potential partners.
“We have already shown that the product that we’ve built is extremely effective and therefore we don’t need a massive team behind us in order to operate.
“But when you’re trying to land partnerships, people traditionally don’t really want to deal with a business that’s got four people in it.
“You’ve got to build a bigger team to have a bigger presence, and then your opportunities will come to you.”
Exit plan from day one
Hydr currently lends directly to small businesses, but Weedall’s ambition is centred on the technology behind that lending.
“I’ve always had an exit plan from the very beginning,” she explains.
“The business proposition has always been software that enables invoice finance for SMEs.
“We became our own lender so that we could prove the software that we built actually works, so the goal has never been really to scale up the lending activity.
“What we want to do now is start to build partnerships to prove that there’s a market for our software.
“The ultimate exit is to sell to a lender, a software provider or a bank that wants to start feeding the really small business market with a lending product that is best for the borrower, best for the lender.”
ASCEND
Weedall is currently in Lisbon representing Hydr through GM Business Growth Hub’s ASCEND programme.
She says the experience has reinforced her drive to think bigger and her belief that UK founders can afford to be bolder.
She says: “The plan in Lisbon has always been about trying to meet or trying to expand the network as much as possible.
“The problem with the UK as a whole really is that we’re not brave enough.
“I am hoping that Web Summit gives me the opportunity to meet potential investors and partnerships from countries that take more risks and are more open to new ways of lending.
“If we want to take the business to the next level, we’ll need to do that with investment.
“It’s about becoming the best that we can be, and doing that means thinking beyond just breaking even.”
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