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Li & Fung’s LFX Gets Into Supply Chain Financing

LFX has launched Air8, a supply chain fintech company to serve the financing needs of small-to-medium enterprise (SME) consumer goods suppliers.

GLP Financial Services has joined LFX as a strategic partner with a 20 percent equity stake in the new company. An LFX digital venture, Air8 will build a technology platform that capitalizes on parent company Li & Fung’s ecosystem of supply chain experience connecting suppliers, buyers and funders in more than 50 markets.

Air8’s goal is to combine supply chain insights with financial expertise and digital technologies to channel capital to vendors.

“No other financing provider has a deeper insight into the supply chain than Air8,” Ed Lam, CEO of LFX, said. “We intimately understand the end-to-end supply chain and are building a digital technology platform that capitalizes on those insights to make funding more readily accessible for SMEs.”

The company said the large trade finance gap is a global challenge, especially for suppliers in emerging economies that lack access to traditional financing programs. Leveraging Li & Fung’s experience, the Air8 team will focus on SME suppliers in the apparel and general merchandise supply chain to help alleviate the pressure of obtaining the necessary funding to fulfill their working capital requirements.

“COVID highlighted the vulnerability of SMEs and their struggle to survive,” Spencer Fung, chairman of LFX, said. “Air8’s mission is to stabilize the supply chain by helping SMEs to better manage their working capital with optimal funding solutions.”

GLP Financial Services is part of GLP Pte., a global investment manager and business builder in logistics, real estate, infrastructure, finance and related technologies. GLP Financial Services specializes in supply chain finance with a focus on technology-enabled risk management and operation, working with customers ranging from brands and logistics companies to manufacturers and distributors, while managing risks for financial institutions.

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“Our strategic partnership with Air8 extends our investment and partnership with Li & Fung into the trade finance arena,” Ming Mei, co-founder and CEO of GLP, said. “Since we joined forces with Li & Fung, we have been collaborating on both sourcing and logistics opportunities, and now with Air8 we are pleased to expand into the fund flows underpinning the supply chain to provide a more holistic solution to both customers and vendors.”

The company is developing a proprietary credit risk management model that provides financial institutions and investors an additional channel to invest in high-quality assets. In turn, Air8 will connect suppliers and buyers to a large and diversified group of funders through an end-to-end insight-based technology platform that quickly facilitates cross-border trading.

LFX is an incubation, investment and operating platform creating digital ventures that transform the supply chain and retail industry through its innovative digital solutions and services. An offshoot of Li & Fung, LFX is building a network of entrepreneurs, technologists and partners who are passionate about digitizing the supply chain and sustainable consumption.