E-commerce has continued to boom in the wake of the Covid-19 pandemic, but running an e-commerce business has also become significantly more chaotic, with unpredictable supply chains, logistical hiccups and higher overhead costs upending the best plans. traced. . To underscore the demand for solutions to address this, today a startup called way flyer – which has created a new kind of funding platform, using big data analytics and rebates based on merchant revenue activity – announces a massive $150 million funding round. It plans to use the funds to double its business after a strong year of growth, with loan deployments on its platform reaching $100 million, almost 100% more than the previous year.
The financing of the Serie B values the Dublin-based startup at $1600 billion.
DST Global and QED Investors co-led the equity round, with new sponsors Prosus, Madrone Capital Partners and JP Morgan also participating, along with previous investors Left Lane Capital and Guillaume Pousaz (the founder of Checkout.com). JP Morgan is something of a strategic investor here: it is not yet a direct partner of way flyerBut as well as being a major financier of tech startups, it's also the world's largest bank and has been buying fintechs to grow that part of its business.
About 65% of customers way flyer they are found in North America, with the remainder in Western Europe (primarily the UK) and Australia. The plan is to continue to invest as much in the technology you use way flyer to assess and make loans as well as growing your business in general, particularly with more partnerships serving merchants (currently including Adobe, Sezzle and eBay UK).
way flyer it's not profitable yet, CEO Aidan Corbett said in an interview. But he noted that the startup has barely used the $76 million in funding it raised in May 2021, and could potentially be profitable this year. Along with this round of capital, the startup also secured $100 million in debt to provide financing.
The valuation is big for an Irish startup, but it's even more remarkable because way flyer, founded in September 2019, has only been around for a little over two years. However, in that time it has grown substantially. Corbett (who co-founded the company with chairman Jack Pierse) said the company currently has "thousands" of clients (exact number withheld) who typically borrow between $300,000 and $400,000 to cover things like inventory purchases, shipping and other expensive items needed to run an e-commerce business.
The problem it addresses way flyer It is usual in the world of electronic commerce, but it has been magnified in recent years. E-commerce businesses regularly face capital shortages, as revenues often don't match expenses because deliveries need to be made on a regular basis, but incoming funds create reconciliation issues.
Corbett said the Covid-19 pandemic makes this situation even more acute, with traders facing especially difficult challenges in 2021. (Ironically, 2020 was less difficult because it was purely Increased demand).
“Raw material prices went up, there were delays in the supply chain, so it took longer to get products, and the cost of shipping went up,” he said of last year. "It was a big blow and they needed our financing more because the time in which they were paid was lengthening." The associated costs just went crazy: For example, the price of a container, an important item especially for smaller merchants who don't charter their own shipping fleets, jumped to $14,000 from $4,000 last year. And supply chain delays increased from four to 12 weeks.
"We have thousands of customer stories" detailing their problems, he said.
The company's technology is a classic game of big data: It uses a number of data sources, from Shopify and Woo Commerce to reviews from TrustPilot and Google Analytics and even broader information about the performance of shipping services, to determine how he is going to a store.
Revenue financing, as it is called, is not an entirely new concept, but with the rise of big data analytics, it has become increasingly ubiquitous and stands in stark contrast to how a traditional bank might have approved a loan in last.
“This gives owners protection against downsizing,” says Corbett. "If a shipment is delayed, it has less cost that month."
But this is also variable and also works in favor of way flyer. “If they do well and outperform, we get paid faster. ", She said.
The big data approach has other benefits. way flyer it can predict when a merchant will run into trouble in the future, and therefore encourages customers to order sooner in those cases. He also has an interesting insight into what is driving sales for companies. Right now, for example, among social channels, TikTok is surpassing Snapchat and Pinterest in referrals.
In terms of competitors, the size of the loans it normally makes and the frequency (depending on the nature and size of the client, loans may be made on a monthly basis) has meant that way flyer it does not compete with, but complements, some of the other companies that have emerged as financiers of e-commerce businesses. These include those from Stripe and Square, or those that issue credit cards to merchants, all of which also base their loans on data from their platforms detailing what kind of inflows and outflows the company is having. However, these tend to be much smaller amounts of money and are not intended to help a trader manage their supply chains. The biggest players in those categories could potentially become partners, or even try to acquire companies like way flyer as they grow and seek to diversify their own income streams.
The competitors of way flyer include companies like Clearchus y Uncapped.
“Aidan, Jack and the team at way flyer They remain focused on helping e-commerce businesses grow and maximize their potential,” said Tom Stafford, co-founder and managing partner of DST Global, in a statement. “We are impressed by your commitment to creating the best products for your customers and proactively help their customers grow through analysis, practical knowledge and financing at attractive prices. We are pleased to continue supporting the team, as way flyer expands globally to provide innovative financing and growth solutions for e-commerce businesses around the world.”
“The pandemic has accelerated the adoption of electronic commerce globally and way flyer is transforming financial services for e-commerce companies that want to scale quickly, helping them gain access to capital, inventory and information on attractive terms,” said Sandeep Bakshi, chief investment officer for Europe at Prosus Ventures. “Aidan, Jack and their team have a deep understanding of what will create value for their clients, and the financial and business innovation that brings way flyer It will help drive e-commerce ecosystems globally.”
