PragmaGO is a fintech company, specialized in financing SME on Polish market. They have built their experience for over 25 years, based on a close cooperation with clients. Company`s offer is being designed in response to changing specifics and needs of Polish entrepreneurs. From 2016 PragmaGO is undergoing digital transformation. The development of PragmaGO is supported by the technological subsidiary – PragmaGOTech. In 2021, PragmaGO was taken over by Enterprise Investors and delisted from Warsaw Stock Exchange. After a few internal rounds the equity has been increased to approx. EUR 20 mln. Interview with Jacek Obrocki, Vice President of PragmaGO. Easy Engineering: What are the main areas of activity of the company? Jacek Obrocki: PragmaGO specializes in fast and easily accessible short-term financing for SME sector in Poland. We build our services based on technology, in order to digitalize our processes in the highest possible extent. Our clients can easily apply for financing 100% online, including AML/KYC and signing agreement. We have automated risk evaluation and financing decisions, as well as payments transfers. Our financing is accessible for companies from different industries, which might have different needs. According to this, the offer and the communication strategy is designed taking into account those differences – to answer the client`s needs in the best possible way. We try to understand mechanics of our customers industries, speak their professional language and grasp the obstacles they face every day. E.E: What’s the news about new products? J.O: We constantly develop our products in response to dynamically changing market conditions. E.g. we have introduced merchant cash advance payments scheme. It bases on the rule that payment schedules are automatically adjusted to the company`s turnover, which helps our clients to maintain financial liquidity. Jacek Obrocki, Vice President of PragmaGO E.E: What are the ranges of products? J.O: We have the widest range of product on Polish non-banking sector. Our offer includes two groups of online products: financing of sales invoices and financing of operating costs. In the first group we offer factoring with long term contract (available in lump up cost model or % fee) and one-off invoice financing. Factoring products are responsible for 92% of sales value (H1 2022). Second group of products bases on revenue based financing and online loans for business purchases and taxes. Entrepreneur can finance purchases like assets and services connected with business operations, as well as taxes and social insurance contributions. Those products are developing with high dynamics – 413% y/y (H1 2022). Our offer not only answers the needs of different companies, but also creates an opportunity to diversify the sources of financing for a single client. E.E: At what stage is the market where you are currently active? J.O: Factoring market is far from full saturation and there is a high growth potential. Nowadays it is growing around 30% y/y. The awareness across MSE about non-banking, factoring products is still rather low, but it is growing, which is a good prediction for a whole market. The factoring market itself is not homogenous. Mid and big entities are usually aware of receivables financing products, but small companies and sole traders are lagging behind extensively. It’s a big challenge but at the same time opportunity since PragmaGO is able to offer profitably top notch products for the smallest. E.E: What can you tell us about market trends? J.O: The consumer market trends are mainly connected with a demand for fast, easily accessible and convenience financial products. It means development of online sales and communication channels and focusing on user experience. Designing effective, digitalized processes will be crucial in order to guarantee safe financing and risk management. Expectations from B2C are being spilt over B2B market. This trend is being strengthened by changes on B2B banking market, which is unable to provide services to SMEs in this way (especially in a situation of high inflation and interest rates). We predict that well-managed companies from non-banking financial sector will gain competitive advantage and retake SME clients from banks. E.E: What are the most innovative products marketed? J.O: Innovation means for us creating solutions (based on technology), which were not widely available on the market before. Such category is embedded finance for B2B market. We are the largest provider of those products in Poland. Embedded finance is ubiquitous in B2C sector, but there is a significant gap in such solutions for the companies. We are filling this gap, by offering services, which might be implemented in day-to-day operations of businesses from different markets, including e-commerce. Our innovative solutions include merchant cash advance, BNPL for business, online loans, as well as online factoring. Thanks to them, entrepreneurs might offer to its stakeholders’ facilities in payments and settlements. This is a win-win situation. Our client gains loyalty, higher sales and margins, while its stakeholders might continue operating the business without liquidity bottlenecks and disruptions. Thanks to many years of experience in financing companies and in-house IT expertise, PragmaGO is able to flexibly adjust solutions to the needs and specificity of a given partner, including technical integration with its online environment. E.E: What estimations do you have for 2022? J.O: We have closed H1 with 60% sales growth. We predict further stable growth for 2022. In the near future, we consider geographical expansion. We will probably focus on CEE region. We do not exclude acquisition of already existing company – with ready-to-operate structure, knowledge of local conditions and trained employees. In such scenario we will implement our best practices – both in terms of products and processes.