In this live episode of The Connector Podcast recorded at the DFS Digital Finance Summit in Brussels, host Koen Vanderhoydonk interviews Xavier Cormont, founder of FinRack (formerly Edebex) and a prominent figure in FinTech Belgium and the European Digital Finance Association. The conversation centers on FinRack’s solution that enables small‑ and medium‑sized enterprises (SMEs) to use their physical inventories as collateral for bank financing. FinRack has built a real‑time inventory valuation algorithm that connects to a client’s ERP or warehouse‑management system, digitises inventory data, and produces an up‑to‑date collateral value. This allows banks to lend against inventory with confidence, overcoming the traditional reliance on balance‑sheet values. The interview walks through a concrete client case – an industrial bakery in northern France – which, after receiving inventory‑backed funding, has achieved 10‑15 % annual growth while retaining existing bank credit lines. Xavier explains how FinRack structures financing through a sales‑and‑buyback scheme, which sidesteps many regulatory hurdles, and benefits from EU VAT rules that eliminate VAT on cross‑border invoices. The company currently serves clients in Belgium and France and is eyeing expansion into Italy, Germany, Poland, and possibly the UK. Technical details are discussed: the necessity for fully digital inventory, daily or real‑time data feeds, and pragmatic use of AI tools for data cleaning and analysis (without positioning FinRack as an AI‑first company). The platform also generates KPIs that help clients optimise inventory levels, leading to reduced warehouse space and environmental benefits such as lower waste. Finally, Xavier outlines FinRack’s go‑to‑market approach – leveraging a network of financing brokers in France, building brand visibility, and conducting hard‑prospecting. He shares the simple three‑field web form used for lead capture and expresses optimism about market reception, while acknowledging the typical entrepreneurial roller‑coaster of challenges and successes.
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Welcome to the Connector Podcast, an ongoing conversation connecting fintechs, banks, and regulators worldwide. Join CEO and founder Koen Vanderhoydonk as you learn more about the latest available trends and solutions in the markets.
Welcome to another podcast live from DFS in Brussels, and I've got with me Xavier. And Xavier has 2 roles in this podcast because he's both the CEO and founder of Finrex, But he's also very much connected, or was very much connected, with FinTech Belgium. So Xavier, can you introduce yourself to the audience, please?
Yes, I'm Xavier Cormont, founder of FinRack today. Previously, I found also another fintech called Edebex, and I was honored to be one of the co-founders of FinTech Belgium, the famous association, and also the EDFa, stands for European Digital Finance Association, which is the association of the national association. So I'm quite involved in the fintech industry in Belgium and also in Europe.
That's great. But today we're going to deep dive a little bit in Finrek, which is your latest company that you founded. So can you please explain us a little bit what you do and which problem do you solve?
Absolutely. So a lot of small and medium companies face a lack of financing. Some of them, and A lot of them actually, they have inventories and they would like to use their inventories as collateral to be funded, preferably by banks because they are very used to work with banks. But then comes a problem. Banks, they don't like inventories as collateral because they are not able to give a real value to the inventories. And so if they take only the balance sheet value it's useless because it's not representative of the reality. And so they don't have any means to, uh, to price those inventories. And so they don't use, or very little use, inventories as collateral. At FINRAK, we solve the problem not by financing without knowledge, but by analyzing and developing a tool, actually an algorithm, that is able to price any inventory in real time. And thanks to that value, then we can fund. And today we start by funding ourselves just to prove that we believe in our software, in our algorithm. And then later, and we have already some banks knocking on the door saying, hey guys, how do you do that? Can we use your tool? Today it's a little bit early because we want to prove really that our algorithm is very strong and efficient.
Xavier, can you give us like a real live example how that translates into concrete examples?
Yeah, sure. I can take the example of our very first client and we are proud to have this client even before incorporating the company. So this client is still live. So the guy continues to use Fynvrak, is an industrial bakery. So yes, they have sugar floor, they have honey, everything to make cakes, to produce cakes. Everything is organic. So it's a very good company based in the north of France. And the entrepreneur was struggling to increase their activity because he has to buy a lot of inventories to produce. And then he has a stock of produced goods and then it's cheap, especially during the end of the year because he produces cakes for Christmas and end of the year. And so we started funding him 2 years ago and the company now is growing like 10-15% a year. When you are in a real economy producing goods, 10-15%, it's not that bad. It's really good. It's not a SaaS company, it's a real one. I mean, producing real stuff. And so the entrepreneur is very, very happy because he could keep also the existing credits he had with the banks. So we are not there to replace, we are here to help the company to increase their financing.
I think it's a good example, especially because of the period we're in. We're in Christmas, so everything is about cakes. I think you guys are actually hovering between traditional banking and real economy, but is it not difficult then also to hover about regulation? So how does regulation apply to you and how do you deal with that?
We are lucky because the way we do financing is through a scheme of sales and buyback. So actually, the real activity of the company is to buy inventories and to sell back the inventories to the same company. So buying and selling goods so far are not very regulated, not on the financial aspect. Then obviously we have the same regulation as every company, but by that scheme, we skip a lot of problems or a lot of hurdles on the regulation side.
Well, you mentioned an example here of the north of France. You're based in Belgium, in Brussels. Is there not a lot of complexity when you actually have cross-border sales, or how do you deal with that?
Actually, it's an added value because of the VAT regulation. What we do, it's everything with— I don't know how to say it, but the company doesn't have to pay the VAT when we invoice them because it's cross-border within the European Union.
And would you consider also taking clients across or outside the European Union? And how would that work?
So far not, maybe with the exception of the UK. because they are not in the European Union anymore. Today we have clients in Belgium, in France, and we consider to have some in Italy and Germany soon because we have good contacts there. Probably UK is a possibility.
Well, earlier you mentioned that you use an algorithm to do valuation, to sort of value the collateral that you have. In a real-time fashion. How does that compare to more traditional finance where you also have collateral value? Do you use haircuts? Do you use tooling and principles from the traditional finance?
No, actually, to work with us, a company has to have all the inventories totally digital, and then we connect ourselves to their warehouse management system or their ERP, whatever they have. We are very pragmatic, so we build something made to measure to have the information on a regular basis. The minimum, it's once a day. Best is real time, but sometimes it's only once a day. And then we manage the data we receive to adapt the data to what we need.
Understood. Well, Xavier, as you mentioned in the beginning, you're very active in the realms of fintech. And I know fintech for good is one of the things that's close to your heart as well. And what you do at FINREC, there's a lot of relationship with that. Would you agree?
Yes, because something strange when we start working with a company is that after a few days or weeks, we have more information or more analysis because they have the information, but we have more analysis on the inventories of our clients than they have. And so they come to us saying, hey guys, at FINRAK, you have KPIs that we don't have today. Can you share those KPIs with us? And then what we see, and probably it will come in the future, is that with our KPIs, they can improve the way they organize their inventories. And then this has an impact on environment because they can reduce the size of the inventories, but also the size of the warehouse. So you can imagine that every warehouse is reduced by 10 or 15%. It looks detailed, but it's super huge. And so it's also to reduce the waste. There are a lot of old stuff in the inventories, so it can be used more frequently. So everything has a positive impact on environment and also on economics.
Yeah. And on this site, you literally talk about real economy. Well, maybe a little bit on the technology side. It's almost impossible not to talk about AI, and especially when you mentioned advanced algorithms. Is there a source of AI as well?
AI, everybody uses AI. When you are looking for a cooking recipe, you go on ChatGPT and you ask ChatGPT. So obviously we use AI. Does it Does it mean that we are an AI company? I would not say that. I would say that we use modern tools, whatever we have, and yes, we use AI tools to make analysis of the potential clients we have and also the clients we have, but we are not a native AI technology company. I prefer to say the truth and not to oversell what we do.
Because in this case, it's all about the outcome, right? It doesn't matter which tool you use as long as the outcome is there.
Absolutely. And what we are looking for is also to be the most efficient as possible. So we receive a lot of data from our clients, but really a lot. So AI is useful to sort those data, to reorganize those data, to clean those data, and then also to start the first analysis. So we reduce the workload, the human workload on the analysis. and to be more and more automatic. Obviously, after months or years of experience, it will increase. And we can also adapt existing tools, existing AI tools to help us. But we are looking for efficiency and we are not looking to use fancy tools.
Yeah, no, understood. Now, Xavier, I think last year, no, 2 years ago, we were in a car together driving to Oradea Onchain Festival, and you were telling me about FINRAK. And now fast forward, The company is live and you already have customers. And how does your future look like of Finrack?
I really don't know. But when I see the reaction of the industry, so I mean the financing industry for SMEs, especially in France, which is a very big market for us, they are very enthusiastic on what we do, on the way we do. And honestly, Koen, we have requests coming from Poland, we have requests coming from Germany, and we are very small, we are very young. So yes, we are very enthusiastic. I'm very happy to see the good reaction. A small example, normally when you are in alternative financing and you ask companies if they want to talk about that, they're reluctant. And with us, they say, yes, you can come, you can take pictures, I'm okay to make videos. So we have a YouTube channel with testimonials from clients, which means that they are very happy about the service, but they're also proud to use FINRAK. So I'm pretty sure that the future is bright. And as every time with a company, it's challenging, it's an adventure. So today I'm very happy, maybe tomorrow it'll be less. Because I have problems to solve and on Monday I will be happy again with a new contract.
I guess you're describing the roller coaster of being an entrepreneur, right?
Absolutely.
No, thank you very much, Xavier. That was a really nice insight in your company. I guess I have one last question before we close this podcast because you say people are coming to you. So what has been like the strategy that you use in terms of marketing? Because you seem to have cracked And not in terms of scaling fast.
So the way we do, the way we started is through a network of brokers. And it's a job that exists in France and much less in Belgium. So in France, there are brokers in company financing. And so they know us since years on a personal way. And so when we called them saying we have a new product and it's complementary to everything you have, Obviously they're happy because it's a wild card they have in their game.
Mm-hmm.
So that's one way to start. And then we start marketing and working on our image to increase our visibility. And then we do hard prospection. There is no miracle when you need clients, you need to get out of your office and to knock doors. Some stay closed, And then some say some open.
I think that's a very wise sort of advice for everyone. I want to ask you if anyone is interested to know more about you, about your company, how do they reach you?
The easiest way is to go now on our website finrac.com. And then there is a small form. It's only 3 fields. Think how much you are looking for, what's the value of your inventories, and if your inventory is digital, you click next, you put your email address, and then off you go. Contact you back.
Thank you very much. Well, Xavier, thank you very much for your contribution in this podcast. Thank you also to the audience. And please stay tuned because there's still a couple of insights coming from DFS this year. Thank you so much.
Thank you, Koen. Bye.
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