Magellan Fetalino: Helping Small Businesses One Invoice at a Time

The CEO and co-founcer of Acudeen, one of the country’s most promising fintech startups, turned a problem that most SMEs experience into an opportunity to help. By Peter Imbong

The CEO and co-founder of Acudeen is helping empower the country's small businesses with his fintech startup

Just a few years ago, Magellan Fetalino III, CEO and co-founder of Acudeen, one of the country’s most promising financial technology (fintech) startups, found himself turning the office of his then small health publication business into his temporary bedroom.

Although the business was stable, they encountered what thousands of small and medium enterprises (SMEs) in the Philippines face every day: pending receivables and unpaid collectibles from clients. Faced with the decision of not paying his employees or not paying his own rent, Fetalino chose the latter.

It’s a decision, he admits, that came quite easy: “From a leadership standpoint, you always want to get things done,” he says. “It gets very difficult, but I’m motivated, especially, at a time like that. If certain sacrifices need to be made, you do it because it’s for the greater good.”

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His case, unfortunately, isn’t an isolated one. Every year hundreds of SME’s in the Philippines—those that make up 99.6% of businesses in the country—suffer from cashflow problems with many facing the prospect of bankruptcy and closure because of it.

Having gone through that ordeal, “There was an understanding that it’s definitely not just me who’s experiencing this problem; it must be something quite universal,” says Fetalino. It thus became a motivation. “If I was able to solve my problem, then maybe there’s a solution available that can help other SMEs go through the same situation.”

Utilizing an opportunity to help

In 2016, Fetalino launched Acudeen with the goal of helping SMEs finance their receivables ahead of time. Their online platform connects funders to SMEs who have receivables from their clients that they can’t liquidate. These funders purchase the invoices at a discount, and the companies receive payment for their goods and services faster.

Since its launch, Acudeen’s growth has been nothing short of extraordinary. In just two years they’ve managed to sell P500 billion worth of invoices through their partnership with 400 SME clients and 700 funders. Acudeen has also expanded to Myanmar and is planning to launch their Vietnam and Indonesia offices within the year. “This just shows how much SMEs lack access to proper financing,” explains Fetalino. “What we did was just to utilize that opportunity to help.”

Fetalino is, of course, downplaying his role in the company’s meteoric journey. But the 27-year-old admits it’s all about setting a vision and letting the people you work with see it, too. “When you empower people, they tend to yield the best results,” he says. “The goal is to give them autonomy; give them space. But at the same time, direction. There’s a balance between the two, and that has been my principle in leadership.”

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Keeping the momentum

Continuing their mission to help the country’s small businesses, Acudeen launched their Ako Din (Me Too) initiative to mentor SMEs in other aspects of their business. On a monthly basis they visit their clients, check on them, their finances, and their cashflow, as well as offer them free seminars. “We want to empower them (this way) because more often than not the money is only a temporary fix to an even bigger issue,” says Fetalino.

Acudeen was declared the winner of Seedstars World, the world’s biggest startup competition, taking home the US$500,000 equity prize

In 2017, Acudeen was declared the winner of Seedstars World–the world’s biggest startup competition– taking home a US$500,000 equity prize. That same year the company received a $6 million (P300 million) financing deal with Rizal Microbank, a unit of Rizal Commercial Banking Corp (RCBC). The two-year-old startup is now larger than most rural banks in the country. How does Fetalino and his team keep the momentum as strong as it can be?

“The only way to motivate yourself is to keep the passion alive. And I source my energy from my people. If I see that everyone around me is enthusiastic, the fire in me stays alive. So I try to be around that kind of an environment full of enthusiasm, full of passion.”

 

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