FastPay Teams With AIG To Launch Media Receivables Funding Vehicle

Financial technology company FastPay has announced it is creating a “receivables securitization program” with an $80 million first tranche. It has partnered with AIG and Cairn Capital, which will offer large amounts of capital to the media and technology sector.

The company said in a release that AIG will provide senior funding as well as back-up servicing and specialist trade finance insurance. Additional funding will be provided by an investment vehicle managed by Cairn.

The endeavor will be available immediately, enabling enterprise companies to get working capital inside a program tailor-made for the needs of the media industry.

“Digital media companies continue to innovate and evolve technologies to increase ROI for their customers. This requires substantial investment and access to multiple capital sources to stay competitive,” said Secil Baysal, president and COO of FastPay. “We are pleased to partner with AIG, a company with a rich history and strong track record in trade insurance and investment management, which makes it a good fit for FastPay and our clients.”

FastPay has so far secured movement of upwards of $6 billion in capital, and has helped to provide liquidity and to reduce financial friction for buyers and sellers in the media and technology space.

FastPay also acquired AnchorOps in a deal that strengthened FastPay’s presence on the buying side of media and advertising. AnchorOps provides electronic payments and reconciliation solution for advertising agencies.

According to Baysal and David Frogel, president of AnchorOps, payment terms in this industry regularly leak into the 120-day mark. “One pain point in this industry is payment terms, which are regularly over 90, 120 days,” Baysal said in a recent discussion with PYMNTS. “Especially for fast-growing companies in this space, that creates a working capital problem.”

“People outside of this industry look at these payment terms, and they’re horrified,” added Frogel. “But it’s not unusual to see. There’s this issue of sequential liability: Agencies only pay suppliers once they’ve been paid by the advertisers. It’s a chain effect.”