The fintech business behind wine and spirits inventory funding platform Ferovinum has today (10th May) announced its launch into the Scotch whisky industry, with an ambition to transform the way distillers, bottlers and brand owners fund their growth.
Backed by institutional capital to deploy £100 million of support for Scottish business in the next year alone, Ferovinum’s innovative technology allows companies to quickly and easily access their ‘liquid assets’, turning stock into working capital to reinvest wherever and whenever it’s needed.
And because Ferovinum is not an exchange, broker or trader, and takes no speculative interest in the value of stock on the platform, power is handed to users so they can stay in control of the process at all times.
Ferovinum was launched in 2018 and is already established as a tried and trusted funding partner to the English wine sector. Founders and global finance experts Mitchel Fowler and Daniel Gibney have now appointed Scottish drinks and hospitality veteran Gregor Mathieson to lead their Scotch whisky operation.
Mathieson is confident that Ferovinum’s flexible funding model – buying stock to release cash into businesses with a long maturation process, then selling it back to meet sales once ready for release – has never been more relevant for the Scotch whisky sector.
After a successful pilot with market-leading independent bottler Adelphi and The Glenturret, Scotland’s oldest working distillery, Mathieson believes a modern, flexible and favourable alternative to traditional bank finance is long overdue, to maximise whisky’s huge potential and help companies stay competitive in global markets.
He commented: ‘Ferovinum is already bringing some real financial muscle to the burgeoning UK wine industry with a model that is now absolutely right for Scotch whisky businesses, many of which are facing the same challenges and opportunities. This is about democratising access to finance with levels of growth funding that have traditionally been out of reach for most companies, whether they’re heritage brands or one of the exciting new entrants to Scotland’s whisky market.
‘Having founded and managed whisky businesses over the past few decades myself, I immediately understood the benefits that the Ferovinum platform brings. Companies typically have a lot of stock, but for most, it sits in warehouses as a completely dormant and untapped asset. Releasing its value using bank facilities is often a prohibitively lengthy and cumbersome process, which is problematic at a time when the need for agility and acting quickly to seize opportunities has never been greater.
‘Ferovinum overcomes these barriers. Once companies are up and running on our platform, they’re in full control of the funding process. They can log in and upload stock to release cash within a matter of days, to expedite funding for any project and buy it back whenever they need it, with no additional fees or penalties. The platform also brings business efficiencies, supporting logistics, stock management, supply chain automation and procurement, helping users protect their profits. And because The Ferovinum team is commercially neutral, we’re on side with expert advice at all times, always working in the best interests of our clients to help them realise their goals and ambitions’.
Case study: Alex Bruce, Managing Director, Adelphi Distillery
As a renowned innovator, Adelphi has used Ferovinum to support larger cask acquisitions and reclaim stock from the open market. Managing Director Alex Bruce explains: ‘Adelphi’s concept of independent bottling has always been to select the finest single casks just in time to bottle and distribute to discerning customers in the UK and overseas.
‘With the ever-increasing demand for single malt, third party supplies have been dwindling and costs rising, so it is essential that we can jump on new parcels without delay. The Ferovinum financing system is ideally suited to fund these purchases without affecting the cash flow of the rest of the business, allowing us to be ready to move without delay’.
Ferovinum was founded by Mitchel Fowler, an experienced investment banker and commodity supply chain expert; and Daniel Gibney, who has years of experience in corporate finance, debt restructuring and hospitality. Through their shared passion for wine and spirits they realised that, unlike many other business sectors, wine and spirits had seen little in the way of funding innovation. Knowing that the biggest barrier to growth was the huge amount of cash tied up long-term in inventory, the Ferovinum idea was born.
Based in London and Scotland, they set the business up to use established structures adopted by investment banks in commodity markets, deploying a broad range of capital from credit funds, banks and other institutions.
Initially focused on importers, distributors and producers within the wine industry, early success saw Ferovinum partnering with industry association WineGB as its finance provider of choice. Ferovinum has enjoyed rapid uptake from producers including Digby Fine English and Simpsons Wine Estate who quickly realised the benefits of its model: effectively buying stock to release cash into their business, particularly during longer maturation processes, then selling it back to meet sales once ready for release.
The Ferovinum platform is designed to be easy and intuitive for users. Clients upload stock to release up to 80 per cent of its wholesale value in cash, which can be repaid at any time without penalties or hidden fees. Fast to set up, flexible and free from complex processes, expensive fees and prohibitive terms, users also have easy access to real-time data and insights. The platform can bolt into any existing supply chain, and the Ferovinum team become partners, giving advice, support and a helping hand whenever needed.
Ferovinum has assembled a significant technology team led by Chief Technology Officer, Ho Yin Lai, adding fintech specialist Max Noble as Head of Growth alongside Gregor Mathieson, co-founder of the award-winning independent bottler Edinburgh Whisky and Scotch whisky industry expert, who joins as Director of Spirits.