Episode #83: Introducing Two: The Fintech Making B2B Purchases As Easy as B2C

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  Samantha Herrick:
  Welcome to the Tech Optimist, the podcast that champions big ideas and bold thinkers shaping the world of tomorrow. I’m your host, Samantha Herrick, and every episode we dive into the cutting-edge innovations redefining industry, communities, and our everyday lives. Today, we’re shining a light on a groundbreaking company called Two at the forefront of change. Their work isn’t just pushing boundaries—it’s rewriting the playbook for what’s possible in tech and innovation. Curious? Stay tuned. You won’t want to miss this one.

  Andreas Mjelde:
  But best of luck going to your local bank and explaining that this new robotic solution is worth getting a special financing deal for. So that’s where we come in. We work with those companies. We build a frame agreement that allows them to offer financing through installment purchasing plans in a matter of seconds.

  Samantha Herrick:
  That is Andreas Mjelde, co-founder and CEO of our special startup company today, Two.

  Laura Rippy:
  Two comes in, professionalizes this critical financing step for B2B companies, and enables them to focus on what they do best while you take care of the financing piece—and really, the partnership is amazing.

  Samantha Herrick:
  Longtime listeners of the show know that voice. That is the legend herself, Laura Bordewieck Rippy, the guide and Andreas’ counterpart for this episode. Oh yeah, and internally, she’s a managing partner and board member at Alumni Ventures. If you’re a new listener to the show, you might be wondering who I am. I am your host, Samantha Herrick, and I’m excited to be here guiding you through today’s conversation.

  So as both the host and producer, I’ll be in the background adding key insights and information throughout the show. Think of me as a fly on the wall, helping bring clarity and deeper understanding to key topics our guests are going to discuss today. Today’s episode features Andreas and Laura. I will be jumping in at key moments to add context, dive deeper into the conversation, and ensure we cover all the important details.

  What if business payments could be as simple and seamless as buying a pair of shoes online? That’s the bold promise of our guest company today, Two—a FinTech powerhouse founded in 2020 by Andreas Mjelde, our guest today. Two is transforming the B2B payments landscape with its groundbreaking buy now, pay later solution for businesses, offering instant, interest-free trade credit that’s setting new standards in global commerce. With $19.3 million in Series A funding from heavyweights like Shine Capital, Antler, and Sequoia, Two is scaling at lightning speed, boasting a staggering 243% quarterly growth across the Nordics and the UK and a growing footprint in Europe and North America.

  Their cutting-edge platform combines rapid credit underwriting, fraud detection, and intuitive receivables management to empower nearly 200 active merchants to operate faster and smarter. With headquarters in Oslo and a sharp, driven team of 72, Two is proving why they were crowned the 2023 Nordic FinTech Award winner for growth. Wow, what a name for that award, huh? This is a company that’s not waiting for the future—they are building it. Stick around as we dive into Two’s journey, their ambitious vision, and how they’re making waves in the FinTech space.

  You know what to do. Disclaimer coming right at you, and then we’ll hop right into the interview where Laura will take us away. Hang tight. Let’s do this.

  Laura Rippy:
  Hey everyone. Taking a quick break to share more about The Yard Ventures. The Yard Ventures is a venture capital fund built for the Harvard community with 20 to 30 investments intentionally diversified by sector, stage, and geography, and co-invested alongside renowned lead VC investors. We leverage our presence in the robust startup ecosystem surrounding Harvard University to secure access to high-velocity startups.

  Yard Ventures nests within Alumni Ventures, one of the most active and top-performing VC firms in the US and one of the only firms focused on making venture capital accessible to individual accredited investors like you. So if you’d like to learn more about The Yard and the opportunity to bring venture capital into your portfolio, visit us at av.vc/yard. Hope you join us.

  Samantha Herrick:
  As a reminder, the Tech Optimist podcast is for informational purposes only. It’s not personalized advice and it’s not an offer to buy or sell securities. For additional important details, please see the text description accompanying this episode.

  Laura Rippy:
  Hey everyone, it’s Laura Bordewieck Rippy. I am managing partner at Alumni Ventures and thrilled to be here with Andreas Mjelde, CEO of Two. We’ve been investors for a while and wanted to share more about the company, where they’re growing, and ways that you might be able to be helpful.

  So let’s kick it off. Everyone loves a good elevator pitch. What is yours, Andreas?

  Andreas Mjelde:
  First of all, thanks a lot for having me here and for investing in our business. Two simplifies B2B e-commerce. We make it as easy to sell on net terms for a business that’s selling to other businesses as it is for a consumer-oriented business to sell on cards. The seller gets paid out the next day as if it were a card transaction, while we ensure that the customer is not fraudulent. We do the credit underwriting of the customer and take care of the payment process on the backend.

  All in all, you can put B2B payments on autopilot but still offer the various kinds of net terms payments that businesses prefer and want when purchasing on behalf of the business.

  Laura Rippy:
  Great. Let’s double-click on that. Imagine you’re talking to a customer—what does that customer look like and how do you make the story come to life for them?

  Andreas Mjelde:
  Yeah. A typical customer for us can start at a scale-up size—a relatively young business but growing fast—and it can grow all the way into the enterprise segment. The common factor is that they’re predominantly selling to other businesses and selling products or services typically in the range of $1,000 up to $100,000.

  In this range, 95% of businesses prefer to purchase on net terms. There are a couple of reasons for that. The obvious one is capital relief because you’re not paying at the moment of purchase but maybe 14, 30, or 45 days later. The CFO loves it as it improves working capital.

  There are also efficiency reasons. For instance, the accountant at that purchasing business often wants to purchase via invoice because it ensures they’ve got all the documents needed for filing accounts. So in that price range, net terms are highly preferred.

  This spans many industries. It can relate to HoReCa—hotels, catering, restaurants restocking all the purchases for the salad, meat, and beverages they’ll sell. It can also be a services-oriented business buying new computers for their employees. So it’s a broad set of applications, but we typically work a lot with services industries, HoReCa, construction, and automotive industries.

  Samantha Herrick:
  All right, Sam here—I’m butting in early to level the playing field. Let’s talk about the quiet revolution reshaping the business world: B2B e-commerce. At its core, this is businesses buying and selling from each other online. Think manufacturers dealing directly with wholesalers or retailers placing bulk orders—all happening on sleek digital platforms that have replaced clunky manual processes.

  This is a space where efficiency reigns supreme. These platforms streamline procurement, cut overhead, and offer features like bulk pricing and customized catalogs. It’s massive—the US B2B e-commerce market alone is worth $2.5 trillion, accounting for 14% of all B2B sales.

  Unlike B2C, where speed and impulse buys are king, B2B focuses on long-term partnerships and larger, more deliberate transactions. Giants like Alibaba and Amazon Business are leading, but niche platforms are also revolutionizing how businesses operate and connect.

  This is where Two comes in, revolutionizing business-to-business transactions. Let’s get back to Andreas and Laura.

  Laura Rippy:
  And remember, you’re actually helping one of our other Alumni Ventures portfolio companies in the robotics space. It’s a secret deal, so we can’t share which one, but I think when we talked about it, it fit what you’re discussing in terms of price point and the help you can provide.

  Is robotics-as-a-service an element of what you’re doing going forward? I think that’s an interesting growth area.

  Andreas Mjelde:
  Yeah. It’s a new vertical for us, but we love it. There’s so much activity in that space and more businesses that have been developing great products for years are now coming to market with great momentum.

  Quite common for all of them is that the customer is not going to make a day-to-day purchase. It could be $20,000, $100,000, or even $200,000. They’d like financing because most business purchases require some financing plan. But best of luck going to your local bank and explaining that this new robotics solution deserves special financing.

  That’s where we come in. We work with those companies, building a frame agreement that allows them to offer financing through installment purchasing plans in seconds—even if the purchase is for a $200,000 robotics solution that will span two, three, or four years.

  Laura Rippy:
  Amazing. And overall market size is a huge opportunity, right? How do you frame it from a market perspective?

  Andreas Mjelde:
  Leaving robotics aside—a fast-growing market that’s hard to estimate—the total B2B payments market is as big or bigger than the global credit card market. We’re looking at payment volumes in the range of $20 to $30 trillion that’s relevant and addressable for net terms.

  Today, most of these payments are managed internally by businesses, which takes a huge toll. They need to build credit capabilities, manage working capital, and handle counterparty risk. Despite the market’s size, it’s still largely untapped.

  Laura Rippy:
  Right. But Two comes in, professionalizes this critical financing step for B2B companies, and enables them to focus on what they do best while you handle financing. The partnership is amazing.

  Are there any customers where that’s really resonated—cases where you’ve clearly helped them grow their business?

  Andreas Mjelde:
  Yeah, many. Let’s start with one example in the HoReCa space. We work with a business called Rekki, a platform connecting lots of food suppliers to the HoReCa industry. The challenge for a fresh produce supplier outside London wanting to sell to the restaurant scene is huge—there are about 10,000 restaurants that could be potential customers…

   

  Most of these are small, medium-sized businesses. They’re hard to really underwrite, hard to really understand, and you definitely can’t go and visit every single one of them yourself. Together with Rekki, we built a solution that allows all of these suppliers across the UK to now accept any restaurant across the UK in a matter of seconds on net terms. Effectively, we can expand the reach of not only the big businesses, but also small and medium-sized businesses who want to reach more businesses. We can do that fully automated where, instead of making a decision over maybe a period of a week, they can now onboard and accept that customer in a matter of 2 to 10 seconds.

  Laura Rippy:
  It really feels like you have almost a network effect. Is that correct?

  Andreas Mjelde:
  Yes, absolutely. On the back end of our platform, at the core of what we do, we’re making a risk decision on the counterparty in the transaction. B2B payments or net terms aren’t complicated because of the capital component and definitely not for the money transfer. There are just so many good methods to transfer money from one business to another today. What’s really, really hard is knowing which businesses you can trust and whether a representative is even a representative of the business itself.

  So, effectively, at the core, we build risk engines. Those two risk engines are split into three main parts. The first one is making a decision on whether or not a counterparty is truly representative of the business they claim to represent. The second one is whether the business is legitimate. There are so many businesses out there whose sole purpose is to commit fraud, obtain credit lines, and then go bankrupt at some point in time after tapping into as much cash and credit as possible. The third decision is a credit decision.

  All these engines are built internally, and the more customers and transactions we process, the better we become at helping our clients manage credit risk and fraud. So, there’s a huge network effect that compounds as you gain customers, gain transactions, and start expanding across markets.

  Laura Rippy:
  I love that. You must have some very happy CFOs among your customers.

  Andreas Mjelde:
  Absolutely. I think the CFOs are typically seeing that a solution like ours can make them net working-capital negative immediately, which is, for many CFOs, one of their main KPIs. I would say that the person who tends to be the happiest is the head of sales or the head of e-commerce sales because there’s a typical friction point.

  Anyone running a B2B-oriented business, anyone who’s been head of sales for a B2B organization, or even a CFO knows this common friction point: The sales team has a new customer—it’s a great lead, it can help capture more volume, or you’ve expanded into the e-commerce channel where you can access tons of new customers—but these customers are not being approved by the other side of the business managing the risk and net terms.

  That other side is seeing more customers coming in, more tension, more pressure to make faster decisions, and pressure to increase the credit line so that the sales team can meet targets. When you plug in our solution, this goes on autopilot. The company no longer has to make these risk decisions. We make them in three seconds and we take on the fraud and credit risk. So this is no longer in scope—they can focus on what they do best, which is delivering a great product or service.

  Laura Rippy:
  That’s fantastic. So you’re taking the friction out of the sales process, you’re giving comfort to the CFO that these financing decisions are made with experts, with professionalism, considering the three levels of risk you solve here. That’s a pretty powerful solution, Andreas. Congratulations on all that you’ve built.

  Samantha Herrick:
  Running a restaurant is no walk in the park. Long hours, countless challenges, and relentless pressure are the ingredients that go into creating seamless dining experiences. Trust me, I know—my dad runs a restaurant at home, and it’s insane how much work ethic you need to keep that business afloat and keep all of your employees afloat.

  That’s a reality Rekki CEO, Ronen Given, knows all too well. Having spent over a decade running restaurants in London, with a deep understanding of these struggles, Ronen founded Rekki, a B2B marketplace app that connects thousands of restaurants across the UK and the US with local suppliers, streamlining the chaos of sourcing ingredients and managing orders.

  But even with Rekki’s streamlined system, there was one major hurdle: restaurants placing multiple orders a month led to a mountain of invoices, each with different payment deadlines. Enter Two. By integrating Two’s trade account and grouped invoice feature, Rekki is able to consolidate 13 monthly invoices into just one—saving time and reducing admin headaches for both chefs and suppliers.

  Ronen calls this a game changer, saying, “Our customers are voting with their wallets and choosing 30-day payment terms over other options. Two has removed so much friction from the purchasing process.”

  And Two didn’t stop there. They customized their solution to fit Rekki’s needs, becoming true partners in simplifying B2B transactions for the food industry. Looking ahead, Rekki is set to scale its impact with Two powering its growth. This partnership is proof that innovation isn’t just about technology—it’s about understanding and solving real-world problems.

  Running a business in the automotive industry isn’t just about parts and repairs; it’s about precision, trust, and seamless service. That’s exactly what sets Bildeler apart. With over 30 years in Norway’s car parts market, this company has mastered the art of connecting customers with exactly what they need—from brakes to suspension—all thanks to their innovative registration number search feature.

  But here’s the twist: Bildeler didn’t stop at B2C sales. They recently entered the B2B market, targeting workshops and repair businesses. While demand soared, so did the complexity of managing credit assessments and billing internally—a bottleneck that slowed their growth.

  Enter again, Two. With Two’s guest checkout solution and credit assessment technology, Bildeler achieved a 96% acceptance rate for B2B customers. By streamlining the payment journey and offering flexible credit, they supercharged operations and boosted sales sustainably. This story is proof that innovation paired with the right partnerships can revolutionize industries.

  Two’s platform seamlessly integrates with existing sales channels—whether it’s e-commerce, phone orders, or in-person transactions. When a customer makes a purchase, Two’s AI-powered risk engines, Delphi and Frida, assess creditworthiness and fraud risk in less than two seconds, ensuring instant credit decisions.

  Approved buyers are offered flexible payment terms—14, 30, 60, or 90 days—giving them the flexibility to delay payments while merchants receive full upfront payment, improving cash flow. And it doesn’t stop there.

  Two takes care of invoicing, reminders, and dunning processes, reducing admin work for merchants. With real-time credit risk management, merchants still maintain control over credit approvals and buyer management. With multi-currency support, Two enables international transactions, giving merchants the ability to grow globally without typical payment headaches.

  So, Two is transforming B2B sales—we already know that—but they’re doing it with simplicity and speed. I wanted to provide more info on their technology and how it works. In the next few minutes, Laura will let Andreas take it away with their ask for the AV community and for the podcast community. But before that, we’ll wrap this up with our last ad for the show and then hop back into the interview with Laura.

  Speaker 4:
  Do you have a venture capital portfolio of cutting-edge startups? Without one, you could be missing out on enormous value creation and a more diversified personal portfolio. Alumni Ventures, ranked a top 20 VC firm by CB Insights, is the leading VC firm for individual investors. Believe in investing and innovation? Visit av.vc/foundation to get started.

  Laura Rippy:
  I want to make sure that we give you a chance for an ask. Normally, I ask this question—what ask would you have for the Alumni Ventures community—but given that you also work with startups, let’s take that in two tiers. What ask would you have for the 1,400 portfolio companies that we have in the Alumni Ventures family, and then what ask would you have in the broader community of the Tech Optimist and Alumni Ventures listening world?

  Andreas Mjelde:
  Yeah, so I have two asks. Increasingly, Two is becoming a network where we bring in banks and empower those banks to offer net terms to their business customers. This becomes more powerful as we bring in more banks with different regional or conflict coverage. Combined, we’re increasingly making net terms something that any business can take for granted and offer to their customers anywhere in the world.

  So, if you are one of those banks, or if you know a bank that’s interested in providing strong value-add services in net terms or B2B payments for their customer base, get in touch.

  And second, we see incredible interest from companies with larger SaaS contracts, robotics contracts, or types of services. If you’re building one of those companies, or if you know of a business that’s now going to market and starting to face challenges with offering financing, underwriting, and approving new customers, get in touch and let us help them grow as fast as possible.

  Samantha Herrick:
  So, if you feel that you can help Two in their future endeavors, hop over to their website and connect at www.two.inc—that’s www.two.inc. You can also connect with Andreas Mjelde on LinkedIn. If you think you can help with either of those asks, feel free to connect and say hello.

  Laura Rippy:
  So Andreas, share your business model with our folks. How do you make money?

  Andreas Mjelde:
  At the core of it, we are a payment solution where we take a take rate on transactions, quite similar to most other payment methods. That’s how we started out and have grown until now.

  What we’re really building is a network where we can connect as many banks as necessary to have global coverage. We and our bank partners combined can go out and offer net terms to any business selling to other businesses around the globe.

  Effectively, this means it’s not only the seller who can plug into our solution through our API and offer net terms to their customers. We also have an API for banks where they can connect to us. Through that, they’ll have a complete solution to offer their customer base of businesses that sell to other businesses and want to streamline and automate this service.

  Increasingly, the business model is shifting from directly serving the seller in a B2B transaction to serving financial institutions who, up until now, haven’t been capable of being there at the point of transaction and helping sellers make sales happen. With that in mind, the business model is gradually shifting and starting to look more like what Visa does compared to another payment company like Stripe or Feris. We’re enabling banks to finally offer net terms as a service to their customers.

  Laura Rippy:
  Net terms as a service to their customers—this is so compelling, Andreas. Is there anything more about this network that we need to know?

  Andreas Mjelde:
  In short, this is a network where banks can connect with us. Through that network, they can both offer net terms to all their business customers and engage in transactions where they can cooperate with other banks—quite similar to how card transactions work, with an issuing bank and an acquiring bank for any given transaction.

  The opportunity for net terms is enormous. We’re looking at $20–$30 trillion in payment volumes currently relevant for B2B net terms offerings. This could be an opportunity for banks quite similar to what credit cards have been on the consumer side for the last 60 years.

  Laura Rippy:
  That’s a brilliant vision, Andreas.

  Andreas Mjelde:
  Thank you.

  Samantha Herrick:
  Thanks again for tuning into the Tech Optimist. If you enjoyed this episode, we’d really appreciate it if you’d give us a rating on whichever podcast app you’re using, and remember to subscribe to keep up with each episode.

  The Tech Optimist welcomes any questions, comments, or segment suggestions. Please email us at [email protected] with any of those, and be sure to visit our website at av.vc. As always, keep building.