Upflow is a French startup we've been reporting on for some time, which first dealt with handling outstanding invoices. It's now announcing that the company changes its strategy to become a B2B payment platform with its own gateway to complement its solution for the automation of accounts receivable.

Like most software-as-a-service products, Upflow started with a centralized hub engineered for a specific reason: the job of the CFO. Beginning with Upflow's dashboards, CFOs and finance teams could see all invoices, track payments, communicate team members, and recall clients.

It integrates well with other financial tools and services to automatically import data from those third-party services. And a tool like Upflow may be very important because many tech companies are struggling to raise their next round of funding and want to improve their cash balance.

But that was just the first step in a bigger roadmap.

"Essentially, my dream has always been that the actual problem is the means of payment," said Upflow co-founder and CEO Alexandre Louisy in TechCrunch. "Today, if you pay for something in a store, you do it with your phone. If you pay your Spotify subscription or your Amazon subscription, you don't even think about how you pay."

"But if you look at B2B payments, the way you pay today hasn't changed in the last 50 years. And for us that's why people struggle with late payments, because the thing I am really trying to fight against is the idea that late payments are linked to bad payers."

According to him, still about 90% of the B2B payments happen offline in the United States. It's still mostly paper checks. In Europe, it's a different story as companies have adopted bank transfers. But transfers "are completely unstructured and require manual reconciliation," Louisy said.

It sells this accounts receivable automation software tool to mid-size companies that earn revenue between $10 million and $500 million per year. The biggest client of the company generates about a billion dollars in revenues per year.

"But when you ask [CFOs], 'What's your strategy for setting up direct debit on part of your customer base?' They don't have a solution," Louisy said. 

Upflow enables you to implement incentive strategies so that a share of your client base shifts to online payments, including card payments or direct debits. What the idea isn't, however, is that suddenly all your clients start paying with a business card. Upflow might facilitate changing the way something like 20% or 30% of your client base pays.

Much like a CRM helps you manage your sales processes with clients, Upflow now wishes to be a financial relationship management solution. It's an interesting strategy as it shows how a startup like Upflow is thinking about diversifying its revenue streams.

With the model shift, Louisy said that from fully based on SaaS revenue, we are now migrating to a hybrid model with both SaaS revenue and payment revenue since we have our payment gateway, which we have set up through Stripe.

Payment is the second brick in Upflow's product suite. The company next plans to integrate financing options with B2B "buy now, pay later" payment methods on the supplier front and factoring for a company's outstanding invoices.

"We evaluate solutions … that provide embedded finance," Louisy said. "It's not our core business to perform risk assessment. On the other hand, what's interesting is that we can bring them useful data for credit scoring that they don't necessarily have when they just connect to one of our users' accounts."