Booste, the fintech offering revenue-based financing (RBF) to e-commerce companies, is today announcing it has raised €12m in Series A funding to expand its model across Europe including in the UK, Ireland and Netherlands. The news comes just four months after the company has announced its launch and the initial seed round in January 2021.
Booste provides flexible financing to companies, with a particular focus on e-commerce businesses, to help them fund growth activities using RBF. Instead of a traditional bank loan which requires credit checks and personal guarantees or venture capital which leads to equity loss, RBF allows businesses to access funding as and when required and to pay it back depending on their revenue income. The innovative model has been quickly embraced by the e-commerce industry, in particular seasonal entrepreneurs.
RBF has been growing as a financial tool for businesses, and the market is expected to grow from $901.4m in 2019 to $42.3bn by 2027. This is in part as a result of the Covid-19 pandemic which has disrupted global supply chains and left numerous businesses with a need to find alternative financial solutions, as well as growth in digital platforms that are filling in where traditional methods are unable to help. That is where Booste comes in.
Boosting e-commerce growth
Booste provides e-commerce businesses with access to funds to finance digital ads such as Facebook or Google ads, marketing campaigns and inventory spent. It takes three minutes to apply and clients receive a personalized offer within 24 hours. Potential customers need a minimum of six months of operating history and to sell through one of the integrated platforms like Shopify, WooCommerce, and PrestaShop. Booste connects to these platforms and accesses the read-only numerical data to generate an offer.
Once an application has been approved, the capital is then available within one day, and clients can begin to spend the funds using a virtual card, or upload invoices to be paid by Booste. Booste charges a flat fee of 6% for financing for marketing activities or 9% for inventory spent. Customers decide how and when they pay back the funds borrowed, such as weekly, biweekly or monthly. This allows them to focus budgets on other growth areas.
Sunglasses e-commerce brand Gepetto found the process fast and straightforward. Activewear brand Carpatree reported sales growth by 64% in one month after using Booste. The next-generation food brand Supersonic was able to accelerate international expansion plans after freeing up capital formerly reserved for marketing purposes.
Investing in the ecommerce ecosystem
E-commerce has undergone exponential growth as a result of the Covid-19 pandemic. In January, online retail sales in the UK alone grew 74% year-on-year, the largest growth since the start of the first lockdown in March 2020. Shopify, the online sales platform, now has more than one million customers and saw its total revenues increase 86% in 2020 compared to 2019.
Booste is ensuring that entrepreneurs can grow their e-commerce businesses by accessing flexible finance and additional resources, such as through the Booste knowledge hub featuring webinars and other content advising on how to use financing to achieve the best results. The company also works with marketing agencies to help support clients with their growth activities and is in the process of building a menu of value added services for e-commerce brands. By investing in the wider e-commerce ecosystem, Booste wants to ensure businesses have all the tools they need to transform their businesses.
The smartest e-commerce startup minds in Poland
Booste’s leadership team is made up of recognised names from Poland’s startup ecosystem, with experience in scaling e-commerce and fintech companies. Co-founder and CEO Jakub Pietraszek was previously General Manager for Uber Eats in Poland, the company’s biggest market in the Northern, Central and Eastern Europe region. Co-founder and CPO Michael Kacprzak previously co-founded TiqDiet, a SaaS platform for dieticians, and also worked at language startup Babbel.
Pietraszek and Kacprzak are supported by a strong group of professionals with many years of experience in e-commerce, banking and IT including: Head of Commercial Łukasz Wrodycki (previously strategic Partner for Mastercard), Head of Growth Julia Ulida (previously growth leader at Shoplo which was acquired by Sumup in 2019); and Head of Engineering Mateusz Sieprawski (formerly tech lead at HRlink – the virtual recruitment platform).
Booste was co-created by Tar Heel Capital Pathfinder, an experienced venture builder which previously also backed the company’s seed round. The newly announced €12 million round is led by DialCom24, the fintech industry leader from Poland. The funding will allow the company to grow the 15-person team and continue to scale up the platform to reach more businesses across Europe.
Jakub Pietraszek, Booste Co-founder and CEO, said: “The past year has seen a surge in e-commerce businesses launching with more people shopping online than ever before. But this means the competition is much harder too. Booste allows e-commerce business owners to cut through the noise by offering funds they can access and use to grow on their own terms. We’re excited to expand Booste to more businesses across Europe thanks to this funding.”
Michael Kacprzak, Booste Co-founder and CPO, said: “We aim at delivering a fast and flawless experience for our customers in the process of receiving financing and repayment. The newly raised capital will enable us to implement further automation and language localization of our service, which will help us deliver on that promise.”
Michał Wrzołek, Senior Investment Director at Tar Heel Capital Pathfinder, said: As an investor involved in the company from the outset, we are happy to see other industry leaders acknowledge Booste’s potential. I am confident that an investment from DialCom24 and Booste’s cooperation with other group companies will translate into the best customer experience and will allow the company not just to become the leading RBF provider in the newly added markets, but also quickly grow beyond them.