The innovative fintech platform Hedgeflows has become a certified Xero app ahead of its public launch at Accountex 2022. The platform has a unique approach to helping UK businesses trade safely and grow internationally. Founded by financial markets heavyweights, it manages the risks faced by growing businesses when they buy and sell goods or services in foreign currencies.

HedgeFlows’ vision is to give SMEs the same advantages that big businesses get from their large finance teams and banks when doing cross border trade. 96% of UK SMEs do not manage currency risks, according to the British Business Bank. They often cite foreign currency fluctuations as one of the main hurdles preventing them from expanding internationally. In stark contrast are HedgeFlows’ clients. Many have saved tens of thousands of pounds since starting to use the new technology, often enabling them to add another hire to their business and fulfilling their international growth ambitions.

Thanks to its simplicity and transparency, the Hedgeflows’ platform removes the need for SMEs to learn traditional risk management. Instead, it uses unique technology, based on the founders’ expertise, to identify, predict, and convert future currency contracts or invoices into guaranteed amounts in home currency. This can be done weeks or months in advance to make international trade simpler and safer for SMEs.

The recent plunge in the value of Pound Sterling against the US dollar highlights the handicap small businesses face when competing with larger peers in international markets. Most global trade is still denominated in dollars and a typical B2B order-to-payment cycle ranges from one to three months. Currencies can swing significantly over such a period, exposing businesses to financial losses. The recent fall of 10% in Pound Sterling has destroyed what are already thin margins for numerous importers, freight-forwarders and travel agencies in the UK.

“Large businesses have specialist teams in their treasury departments who utilise complex systems to protect profits and cashflows from currency swings”, says Alex Axentiev, a co-founder of Hedgeflows. Alex previously ran global FX derivatives businesses in leading banks, helping blue-chip customers around the world manage such risks. “Sadly, most smaller businesses can’t access similar products and even if they do, are not trained to make the best use of them.”

“Almost all the clients we spoke to when we started to design this platform said the same thing: they wanted to trade internationally, yet at the same time manage their finances in a single currency”, says Neh Thaker, who ran the Financial Markets division at Standard Chartered Bank before starting HedgeFlows with Alex. "This is exactly what HedgeFlows enables them to do. It uses the latest technologies to remove unnecessary risks and costs. This levels the playing field for small businesses and aligns with the UK’s ambition to see British SMEs grow internationally.

"As is to be expected, HedgeFlows is regulated by the Financial Conduct Authority (FCA). Its unique technology integrates other useful features to help SMEs; these include a multi-currency business account, mass payments in 30 currencies and two-way integrations with popular accounting software. With its ability to level the playing field for SMEs, HedgeFlows was selected as one of 10 high-impact, high-potential new ventures by the prestigious Oxford University Elevate Accelerator in 2021.