Most talk about valuation when fast-growing Irish fintech startup Wayflyer announced in February that it had raised $ 150 million in equity investments from a consortium of supporters, including global investment bank JP Morgan. It was a thing.
After its launch in April 2020, Wayflyer Ireland’s sixth “unicorn” company (private with a valuation of over $ 1 billion) with a Series B funding round to fund the next phase of development. It became a technical startup).
With an estimated $ 1.6 billion (€ 1.5 billion), Wayflyer easily qualified. It also moved to consumer branding and sponsored the famous Irish golfer Shane Lowry.
However, there wasn’t much discussion about what the company actually did. At the end of the tech-loving bull market, perhaps it wasn’t that important, but the world has changed a lot since February.
With inflation hitting the US and European Wayflyer markets and central banks hiking, business models are once again important and money is no longer cheap and easy.
Therefore, it is worth noting that JPM is back in Wayflyer. The Wall Street company has recently approved a $ 300 million debt loan in early May and is preparing to approve a new loan facility for the company.
But that’s the pace of Wayflyer’s growth, and the company is already looking for more support to increase this year’s sales from $ 500 million in 2021 to $ 2.5 billion.
In essence, that means providing working capital to e-commerce companies that are about to expand rapidly and are facing barriers that cannot be overcome by themselves. There’s more to the back end, but the basic product is funding.
“We are solving financial problems,” says Chief Revenue Officer Dan O’Brien.
“If I buy a lot of stock and sell it all, at the simplest level, the next thing I need to do is buy more stock, but my income is that to me I’m not going to give you room to do it. “
As O’Brien says, Wayflyer “closes the hole” by supplying cash for inventory and marketing and taking what he calls a “small upfront fee” and a percentage of future sales.
Banks and asset lenders need as much as one million miles from simple bank and invoice discounts, except that they need unsecured capital and tend to avoid emerging e-commerce companies that may be less eligible to borrow. Not far away. In short, growing digital companies usually look to expensive venture capital and private equity.
“The reason we’re closing that hole is that if you go out as a company and raise venture capital, etc., you’ll give it property or a company to fund your working capital,” O’Brien says. ..
“Basically, all you are doing is creating a rotation that you are constantly asked to go out, collect money and give more and more of your company.”
The partnership with JPM makes Wayflyer a type of loan originator for Wall Street Bank, which has its own ambitions in the fintech payments space and is partially pursuing it through investments in promising companies like Wayflyer. I am.
The reason is easy to understand. Global e-commerce is set to exceed $ 5 trillion this year, and Wayflyer has arrived at the right time, just as the Covid-19 pandemic has made everyone an online shopper.
To date, Wayflyer has been sticking to the small end of e-commerce, with selling companies generating $ 1 to $ 12 million annually. But that is changing with the help of JPM. The company has just launched a new revolving credit product called Scaler that sells more than $ 20 million in revenue. And because Wayflyer’s own revenue is fixed to client sales, that means faster growth.
That is the fin side of FinTech. What’s happening behind the scenes? Not surprisingly, it’s all about data, which Wayflyer calls “technical underwriting.”
“We connect to their sales, analytics, marketing, and bank accounts,” says O’Brien.
“So we have a big picture of the company and the cycle is how they are profitable and how efficient they are on the marketing side.
“It allows us to evaluate them, which means we do not have to place strict trust in securities or anything like that.”
With the immersive data, Wayflyer can make quick credit decisions with the help of AI and quickly fund merchants. Traditional lenders can take several months.
The data is also recycled to value-added services such as analytics, marketing support and delivery assistance, and Wayflyer can be sold to borrowers.
“We see a lot of the same trends within the enterprise and within the industry, and we know how to help them increase their lifetime value and reduce acquisition costs,” says O’Brien.
“We want e-commerce companies to be able to run their brands in apps with many tools and act as an ecosystem that integrates them.”
O’Brien acknowledges that the post-Covid environment is not an easy place to keep running.
“The macro environment is obviously very harsh, but we are really well set up to make it successful.
“From that point of view, for now, we want to achieve great results and grow as much as possible, and next year we want to focus on embracing it and trying to do exactly the same thing.”