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The recent collapse of Stenn, a once-promising fintech venture valued at nearly $1 billion, bears stark similarities to the infamous Greensill scandal, raising serious concerns about the trade finance sector’s due diligence practices.
The London-based company, which positioned itself as a leading European fintech whilst operating in traditional invoice finance, ceased operations in December 2023 amidst troubling links to Russian money laundering activities. The collapse has left creditors facing potential losses exceeding £100 million.
Stenn’s business model appeared straightforward – purchasing invoices at a discount from businesses awaiting payment from larger corporations. The company securitised these invoices, creating assets that institutional investors could finance, theoretically generating a profitable cycle of continuous lending.
High-profile partnerships with financial institutions including Barclays, Goldman Sachs, and Citigroup lent credibility to Stenn’s operations. The company secured a substantial $50 million investment from Centerbridge in 2022, valuing the enterprise at $900 million.
Red flags emerged when US authorities uncovered Stenn’s connection to Feliks Medvedev, a Russian citizen convicted of operating an unlicensed money transmitting business that moved over $150 million in Russian funds. While Stenn and its Russian founder, Greg Karpovsky, faced no direct accusations, the revelation prompted HSBC to launch an investigation.
Questions intensified when several of Stenn’s purported major clients, including Zalando SE and Yokogawa Electric Corp, denied having any business relationship with the company. These denials cast doubt on the legitimacy of Stenn’s invoice portfolio.
The collapse mirrors the Greensill scandal’s impact on the trade finance sector, with industry experts predicting tighter institutional lending controls and increased scrutiny of trade credit insurance. Administrators from Interpath are currently conducting a forensic review of transactions, investigating potential irregularities within the failed business.
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