E-commerce has continued to grow, but it has also become more chaotic due to the influx of new supply chains and higher costs. To address this, a startup called Wayflyer launched a new kind of financing platform that uses big data analytics and fixed-rate loans to help merchants.
Initial Valuation Puts Series B at $1.6 Billion
QED Investors, DST Global and J.P. Morgan all participated in the round. Aside from J.P. Morgan, other new investors include Madrone Capital Partners and Prosus. Wayflyer currently serves 65% of its customers in North America and Europe, and the rest are in Australia and the U.K. Its goal is to continue investing in technology and growing its merchant base.
According to CEO Aidan Corbett, Wayflyer is not yet profitable, but despite not touching the amount of funding it raised in May 2021, it could still be profitable this year. The company secured a $100 million loan in May.
The valuation is significant for a startup, especially since Wayflyer was only around for two years. According to Corbett, the company currently has thousands of customers who take out loans of up to $400,000 to cover various expenses, such as inventory purchases and shipping costs.
The company’s goal is to help e-commerce businesses avoid experiencing the same issues they have had in the past. E-commerce businesses often face shortages of working capital, which can cause them to delay making payments and incur other expenses.
The rise of the COVID-19 pandemic made it more difficult for e-commerce businesses to get working capital, Corbett said. Fortunately, the effect of the cold and flu season in 2020 was less severe than it was in 2021.
Last year, Corbett noted that many e-commerce businesses experienced supply chain delays and higher costs due to the rise in raw material prices. These factors caused them to require more funding from their investors. For instance, the cost of a container went up from $4,000 to $14,000.
Wayflyer’s technology is built on big data, and it uses various sources of data to determine how a merchant is performing. It then uses this data to make calculations and determine the basis for its loans.
Adding Revenue Financing to the Mix
Revenue finance is a new concept that’s becoming more prevalent. It allows banks to provide working capital to e-commerce businesses instead of just making a loan.
Its ability to predict when a merchant might be experiencing more issues is also beneficial for Wayflyer’s customers. For instance, right now, TikTok is outpacing Facebook and Instagram in terms of referring business.
Dil Bole Oberoi
