You've found us in English! The English version of is currently only available in a beta version. This means, among other things, that the majority of articles are machine translated. We hope you'll still want to stick around a little longer

From a school project in Indonesia to big investments: How Fellow Pay helps entrepreneurs grow their businesses

Fellow Pay makes it easy and flexible for small businesses to get their invoices paid immediately. At the same time, they see themselves as a “buy now, pay later” service for the invoice receivers.

Finally. The big deal has finally been signed. But the payment will not arrive before 60 or maybe even 90 days later. The product or the service has to be delivered, but the money to pay for it isn’t in the account, so what are you supposed to do in the meantime as an entrepreneur?

Long payment terms can be fatal for startups. This is the problem that the startup Fellow Pay is helping small and medium-sized enterprises (SMEs) solve with a new financing solution, based on issued invoices.

“When SMEs struggle with long payment terms at 2-3 months or even longer, we’re able to provide them with payment right away. We charge a small fee, pay the invoice, and then it is Fellow Pay that is waiting for the payment from the invoice receiver. Getting the payment immediately and not having to wait for it gives the SMEs the opportunity to grow faster,” says Christian Thisted, co-founder of Fellow Pay.

At the beginning of 2021, Fellow Pay launched the solution and took on its first users. Today, business is picking up rapidly, and users can have their invoices paid quickly.

“The user goes to our website and uploads the invoice as well as a few other pieces of information. After that, we perform an immediate credit check on the invoice receiver. Then, our standard contract is sent to both parties – the issuer and the receiver – for them to sign. This process is typically completed within an hour, but the fastest we’ve experienced was 11 minutes,” says Christian Thisted.

The two founders, Christian Thisted (27) and Jacob Vorsø (31), met each other at Aarhus University. In April 2020, the two young founders hired CEO Chris Pedersen (on the left), who brought in experience and knowledge from a long career in investment banking.

From Herning to Bali

The two founders of Fellow Pay met each other when they were studying Business Development Engineering at Campus Herning, a part of Aarhus University. An entrepreneur-focused course where students are able to work on their business while studying.

Straight away, the two knew they wanted to create something together. This came closer to reality when they were both accepted to the Dual Career programme which aims to support entrepreneurs to succeed in their studies while starting a business at the same time. However, it wasn’t until four years ago – when they were to begin their bachelor thesis – that the idea of flexible financing for SMEs emerged.

Actually, the idea came from the third co-founder, Lars Andersen, a business lawyer. He had previously found himself in a situation where a client was in need of flexible financing, but as Lars couldn’t find a suitable solution, he decided to develop his own. He came up with an idea that would later turn into the Fellow Pay model – an alternative to bank loans and so-called factoring.

But there was one big challenge: The model involved a lot of paperwork. So, to figure out if the model was scalable by digitalization and automation, Lars presented the idea to Christian and Jacob who then decided to dedicate their bachelor project and last semester in university to it. “If we were able to automate this and thereby make it scalable, we knew it would be a business case. So we decided that we wanted to make a genuine effort. We convinced the three other guys in our study group to terminate their apartment rentals and travel to Bali where we rented a co-living. This meant we could intensely write our thesis and build the prototype – while climbing volcanos on the weekends,” says Christian Thisted.

The Bali trip did result in good grades, but more importantly, it should soon prove to have laid the foundation for the two co-founders’ new business adventure. When they returned to Denmark in the summer of 2018, they moved to Copenhagen, became a part of Copenhagen Fintech Lab and went all-in on Fellow Pay.

A tool for issuer and receiver

Immediate payment on invoices is not a new concept. There are other solutions in the market, most of which fall under the term factoring. But with its new model, Fellow Pay covers the risk in a new way that makes them able to offer a different level of flexibility: The customers receive their payment from Fellow Pay and pay a flat fee of 3,75% of the invoice. It’s entirely up to the client what invoices they want Fellow Pay to finance. This also applies to new clients and international clients, which can sometimes be a challenge to handle for traditional factoring companies.

While Fellow Pay is focusing on being a service for the companies that issue invoices, they also see themselves as a service for the invoice receiver that wants a “buy now, pay later” solution. For this reason, it’s up to the invoice issuer and the invoice receiver who pays the fee to Fellow Pay, or if they want to split it between them.

“We’re not only thinking about the companies that need money now, but also their customers (invoice receiver) that potentially would like a longer payment deadline. Even if the invoice is issued with a 30-day payment deadline, the receiver can come to us and extend it to 90 days. So, both the issuer and the receiver are happy which is an extremely important part of our model,” says Christian Thisted.

Fellow Pay was close to agreeing a deal with a large bank at the end of 2019. But when covid hit and when the deal was blocked, Fellow Pay decided to raise funding from private investors instead.

Financing invoices for millions

In June this year, Fellow Pay announced that it had raised a new funding round of €325,000, which took the startup’s total pre-seed funding to €2,500,000.

And it’s obviously not without reason that investors choose to trust Fellow Pay. Business is starting to look better and better, especially since the company opened for cross-border transactions between 46 countries worldwide.

“This year, we have seen a lot of traction, and business is starting to look really good. Within a year from now, we expect to have financed invoices worth a two-digit million amount in euros,” says Christian Thisted.

Until now, companies in 9 different countries are using Fellow Pay, and especially England has proven to be an interesting market with a lot of traction. It was also from England that the co-founder recently received some client feedback that reminded him of what they actually want to achieve with this solution:

“The client asked me to take a look at his new customer to see if we would be able to finance an invoice. He told me that the financing would lay the foundation for a big contract he was negotiating at the time. And this is exactly why we do it. This is what gives us the biggest kick: When we receive messages from clients who tell us that our service provides new opportunities for them and enable them to grow faster – because they receive the payment so much quicker.”

Er du investor - eller bare ekstra nysgerrig?

Tilmeld dig nyhedsbrevet "Investornyt", hvor du får portrættet af Ugens Startup med ekstra baggrundsviden og en oversigt over de seneste investeringshistorier i økosystemet lige i indbakken.

Vi spammer ikke! Læs vores privatlivspolitik hvis du vil vide mere.