Dive Brief:

• Stripe is partnering with global shipping giant FedEx to combine their data insights from logistics and financial infrastructure to create financing options for small businesses, the companies said Tuesday in a joint press release.
• The initiative ties the businesses of FedEx’s data analytics firm, which it calls Dataworks, and Stripe’s lending arm, which makes loans for smaller businesses. Stripe and FedEx plan to “expand access to financing for tens of thousands of small- and medium-sized businesses,” they said in the release.
• “Together, we can turn the operational momentum of a small business, like shipping a thousand packages a week, into access to growth finance,” John Collison, Stripe’s co-founder and president, said in the release.

Dive Insight:

FedEx established its data analytics unit in 2020, a company spokesperson said Tuesday in an email. The unit uses artificial intelligence to analyze companies’ logistics and supply chain operations.

The companies contended that “securing capital remains a persistent hurdle for logistics-heavy” small and medium-sized businesses. 

That’s because traditional lending models depend on credit scores and banking data, “often overlooking operational indicators such as shipment activity, inventory movement and fulfillment performance,” the release said.

Stripe aims to use the partnership “to help inform financing analysis” by leveraging “supply chain intelligence” and “real-time operational signals” from these smaller companies gained from FedEx data, according to the release.

“Stripe will be better positioned to evaluate, approve, and deploy tailored funding more quickly than traditional lending processes, eliminating the friction for SMBs,” the release said. Stripe makes business loans through two partner banks.

The FedEx effort follows Stripe’s purchase last week of embedded financing company Parafin, which also arranges loans for small businesses. Stripe plans to use the San Francisco-based startup to expand its lending for smaller firms. In the Sept. 30 news release about the Parafin acquisition, Stripe argued that small businesses are finding it difficult to access capital, citing a decreasing percentage of approved loans last year compared to 2015.

FedEx and Stripe described the announcement as the start of “a strategic, long-term collaboration” that aims to scale their logistics and financial data into services by early next year. A Stripe spokesperson declined to comment Tuesday on the partnership beyond the companies’ press release.

FedEx, based in Memphis, Tennessee, delivers about 18 million packages daily in around 220 countries and territories, according to its website.

“Every day, FedEx helps move more than $2 trillion in global commerce, giving us unique visibility into how businesses operate," Vishal Talwar, FedEx’s chief digital and information officer and president of the data segment, said in the release.