The second week in July was busy for Fluent, the Lexington-based startup making waves in the world of financial supply chains thanks to its creative use of blockchains, the underlying technology that helped Bitcoins rise to prominence.
The office was filled with employees who normally work out of offices in New York City, Kansas City and other locations throughout the United States. The employees were called to Lexington to participate in one of several group work sessions that take place throughout the year, particularly when the company is in the midst of a major milestones.
“We like to get the entire team together in Lexington just to go over things and let people code with each other for about 100 hours,” co-founder Casey Lawlor said. “It is especially important when things are happening fast, like they are now.”
Indeed, big things are happening for the company, which was founded in 2014 and now operates out of offices on Georgetown Street in Lexington. In March, Fluent unveiled its software platform and soon after raised $1.65 million in seed funding to go along with the $875,000 it raised last year.
The Fluent network is a financial supply-chain startup that is looking to use the underlying technology in Bitcoins – the blockchain – to streamline and more safely process invoices and statements among businesses participating in large supply chains.
Bitcoins are a type of online currency that has been around since 2009 and was the first technology to use blockchains, a computerized ledger that tracks and timestamps all the transactions that have ever been executed with the currency.
Fluent hopes to use the same technology in the realm of supply-chain finance, which would allow for quicker invoicing and payments for suppliers in the supply chain by tracking ownership of invoices.
In traditional supply chains, services are provided and invoiced to the customer, but payments can often take weeks or months to process depending on the complexity of the supply chain and the process by which it is verified that the goods and services have actually been delivered.
The Fluent network would allow payment to be immediately released to a client once delivery of the goods or services takes place, as well as aid with the verification of the work itself.
Fluent also offers protection to financial institutions participating in the supply chain. In order to deal with cash fl ow shortages, some suppliers will sell their invoices to a third party, such as a financial institution. Doing this requires vast amounts of paperwork and verification to ensure a company is not selling the same invoice to multiple institutions, which is known as a “double-spending” an invoice. Fluent safeguards against this practice because the system tracks ownership of the invoice.
The Fluent platform also adds flexibility when making payments, which can often be complex in large supply chains. When payments are made for a particular invoice, the money can be directly distributed to the owners of the invoice, even if it involves multiple parties or other finance providers. All of that information is recorded and easily accessible within the blockchain ledgers by those participating in the supply chain.
Many of the traditional problems associated with supply chain financing are eliminated by the Fluent platform, said co-founder and CEO Lamar Wilson, a Lexington native.
“Fluent connects previously siloed institutions, lowering risk and operating costs for supply chain financing.” Wilson said. “By eliminating these barriers, we can prevent the most common forms of fraud across global supply chains.”
Lawlor said that in some cases the time waiting for a payment can be drastically reduced by using the Fluent platform.
“Instead of it taking maybe 90 or 100 days for a supplier to get their funds, they might be able to get it in 15,” Lawlor said. “The risk is greatly reduced for everyone involved.”
Lawlor said Fluent is currently involved in a proof of concept with a “large Midwest financial institution,” which he describes as a technical vetting process to customize the platform for the client’s specific needs.
Company leaders stress that they are not creating something new but simply using technology to help address some of the issues that have long plagued large supply chain networks.
“At the core of many global networks is the efficient sharing of information to benefit all participants,” Taylor said. “Fluent is no different and is applying this same fundamental rule to a very complex process that involves coordination between a multitude of groups around the world.”
Wilson is no stranger to success in the technology world. After discovering Bitcoins a few years ago, he and friend Lafe Taylor founded the Pheeva wallet in 2014. At the time, it was the only iOS-compatible Bitcoin wallet on the market. Taylor is also a co-founder of Fluent, and the two have worked on several projects together.
Lawlor grew up in St. Louis and became fascinated with Bitcoin technology a few years ago. He met Wilson and Taylor at various industry events and was struck by their passion for this new technology. He said that is a major reason the world is starting to take notice of the Fluent network.
“I just kind of saw what they were doing and loved what they were about, so I knew we had to do a project together,” Lawlor said. “To see it coming together now is really exciting. We’re very excited about the future of this project.”