As supply chain constraints are at an all-time high, e-commerce brands are definitely feeling the heat. With so much uncertainty, younger, smaller digital natives remain at risk of being cash-strapped even if they are generating high demand.
Wayflyer, which calls itself a revenue-based financing and growth platform, offers online businesses funding from $10,000 to $20 million. What’s more, the platform can advance cash to brands in need when their goods are out in transit.
CEO and co-founder Aidan Corbett said that in many cases, even profitable and cash-flow positive brands often need funding between the time they paid for their inventory and when they actually generate revenue from it. This gulf has only widened over the past year as shipping delays have become the norm and brands are forced to wait for product to get to their warehouses.
“If I was to make an order for my commerce business for Black Friday, I would call up my supplier in August, and say, ‘I would like a $100,000 order.’ The supplier would say, ‘I need $30,000 today to process the order.’ In three weeks’ time, the order is ready to be shipped, but it will not leave the factory until the remaining 70 percent is paid,” Corbett told Sourcing Journal. “Now, that order could spend a lot of weeks in transit, just given the way the supply chains are, then it arrives at your [facility], then you spend money on marketing. Only then do you actually monetize that inventory order.”
As opposed to financing options that include interest fees or dilutive equity stakes, Wayflyer charges its merchants a single fixed fee, and asks for remittance as a percentage of their daily sales. This aims to offer more flexibility than a typical fixed bank loan.
Related Stories
“The interesting thing about the revenue-based finance model is it creates alignment between both sides,” Corbett said. “If I give you money tomorrow and you grow incredibly quickly because I take a percentage of your daily sales, I would also get paid back faster. If you do not grow very quickly, or if your sales decline, I will get paid back a lot slower. So I am incentivized to help brands grow, I am not incentivized to come down on them with a hammer and stress them out.”
In May, the Dublin-based company raised $76 million led by Left Lane Capital in an effort to further expand in the U.S. and build out its sales and customer support teams, with the company opening an office in Atlanta just one month later. At the time of the expansion, 75 percent of Wayflyer’s clients were U.S., where the financing platform a New York office.
The working capital provider says it has advanced more than $250 million since its launch in April 2020. But as the backlogs piled up, Corbett was well aware of the need to pull forward demand, recommending that clients place holiday season orders as early as July.
“We need to be careful when we’re underwriting, to make sure that the company is going to get the products on time, particularly if they’re gearing up for a big holiday season,” Corbett said. “Certain verticals struggle more with this dynamic than others, so if you’re an apparel company and let’s say you’re selling athleisure, you’re probably making inventory orders on a more regular basis. But if you’re selling toys, you’re making very big orders at specific times of the year, so certain verticals that we serve are more affected by supply chain difficulties and inventory prediction and inventory ordering. Basically, the more seasonal, the more difficult.”
One of the major advantages that Corbett believes the platform poses compared to other financing alternatives is that the business was spun out of another marketing analytics company he founded, Conjura, for consumer businesses. Already experienced in Facebook ads and transactional data to help brands improve lifetime value, Corbett took his learnings at Conjura to build the analytics side of Wayflyer.
Wayflyer’s analytics platform is free, helping users optimize their marketing spend. Businesses that haven’t yet applied for an advance can get a better read on their current spending habits. With the $76 million funding, Corbett also wants to bolster the “non-finance” products including the analytics capabilities.
In both instances of inventory and marketing, the company can pair a seller with either an analytics specialist to review its marketing performance or an inventory sourcing expert to examine current terms with suppliers.
As part of its expansion, Wayflyer began partnering with various tech providers across functionalities, including Adobe Commerce and WooCommerce, giving the team access to e-commerce businesses selling on both platforms.
In August, the financing platform partnered with “buy now, pay later” technology Sezzle to power the company’s working capital lending program, Sezzle Capital, giving more than 34,000 retail clients access to working capital.
“Buy now, pay later companies are competing incredibly aggressively for consumers and also for merchants,” Corbett said. “They have to do that because they don’t actually have as much data that they collect on the merchant. With the merchant finance that we’re doing, and other embedded finance products, you can actually layer on additional services and products on top, and finance is just one element of it, albeit the element than that you tend to monetize.”