Wayflyer which has built a new kind of financing platform, using big data analytics and repayments based on a merchant’s revenue activity is announcing a big round of funding, $150 million. It plans to use the funds to double down on its business after a strong year of growth, with average monthly capital deployments (that is, loans) on the platform reaching $100 million, up nearly 1,000% on the year before.
The Series B funding values the Dublin-based startup at $1.6 billion.
DST Global and QED Investors co-led the all-equity round, with Prosus, Madrone Capital Partners, and J.P. Morgan — all new backers — also participating, alongside previous investors Left Lane Capital and Guillaume Pousaz (the founder of Checkout.com). J.P. Morgan is something of a strategic investor here: It’s not a direct partner (yet?) of Wayflyer, but in addition to being a major financier of tech startups, it’s also the world’s biggest bank and has been buying up fintechs to grow that part of its business.
Some 65% of Wayflyer’s customers today are in the U.S. and North America, with the remainder in Western Europe (mainly the U.K.) and Australia. The plan is to continue investing both in the technology that Wayflyer uses to evaluate and make loans, and to continue growing its business overall, in particular with more partnerships to serve merchants. (Those partners today include Adobe, Sezzle, and eBay UK.)
The crux of the problem that Wayflyer is addressing is a persistent one in the world of e-commerce, but it has definitely become more exacerbated in the last couple of years. E-commerce businesses regularly face shortages with working capital, with funds coming into their accounts often not matching up with expenditures because outgoings need to be made on a regular basis, but incoming funds face reconciliation and other delays.
Revenue finance, as this is called, is not completely a new concept, but with the rise of big data analytics, it has become increasingly more ubiquitous and stands in contrast to how a traditional bank might have made a loan in the past.