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Wayflyer, a revenue-based financing platform for e-commerce merchants, has raised $76 million in a Series A funding round led by Left Lane Capital.

“Partners” of DST Global, QED Investors, Speedinvest and Zinal Growth — the family office of Guillaume Pousaz (founder of Checkout.com) — also put money in the round. The raise comes just after Wayflyer raised $100 million in debt funding to support its cash advance product, and 14 months after the Dublin, Ireland-based startup launched its first product.

With an e-commerce boom fueled by the COVID-19 pandemic, Wayflyer is the latest in a group of startups focused on the space that has attracted investor interest as of late. The company aims to help e-commerce merchants “unlock growth” by giving them access to working capital (from $10,000 up to $20 million) so they can improve cash flow and drive sales. For example, more cash can help these merchants do things like buy more inventory in bulk so they can meet customer demand and save money. 

In a nutshell, Wayflyer uses analytics and sends merchants cash to make inventory purchases or investments in their business. Those merchants then repay Wayflyer using a percentage of their revenue until the money is paid back (plus a fee charged for the cash advance). So essentially, the merchants are using their revenue to get financing, hence the term revenue-based financing. The advantage, Wayflyer says, is that companies make repayments as a percentage of their sales. So if they have a slow month, they will pay back less. So, there’s more flexibility involved than with other mechanisms such as traditional bank loans.

Co-founder Aidan Corbett believes that in a crowded space, Wayflyer’s use of big data gives it an edge over competitors.

Corbett and former VC Jack Pierse spun Wayflyer out of a marketing analytics company that Corbett had also started, called Conjura, in September 2019.

“Jack came to me and said, ‘You should stop using our marketing analytics engine to do these big enterprise SaaS solutions, and instead use them to underwrite e-commerce businesses for short-term finance,’ ” Corbett recalls.

And so he did.

“We just had our heads down and started repurposing the platform for it to be an underwriting platform,” Corbett said. It launched in April 2020, doing about $600,000 in advances at the time. In March of 2021, Wayflyer did about $36 million in advances.

“So, it’s been a pretty aggressive kind of growth,” Corbett said.

Over the past six months alone, the company has seen its business grow 290% as it has deployed over $150 million of funding across 10 markets with a focus on the U.S., the United Kingdom and Australia. About 75% of its customers are U.S. based.

Wayflyer plans to use its new capital toward product development and global expansion with the goal of entering “multiple” new markets in the coming months. The company recently opened a sales office in Atlanta, and also has locations in the U.K., the Netherlands and Spain.

To Corbett, the company’s offering is more compelling than buy now, pay later solutions for consumers for example, in that it is funding the merchant directly and able to add services on top of that.

“There’s a lot more opportunity for companies like ourselves to differentiate because essentially, we focus on the merchants. And when we underwrite the merchant by getting data from the merchant, there’s a lot of additional services that you can put in on top,” Corbett explained. “Whereas with buy now, pay later, you get information on the consumer, and there’s not as much room to add additional services on top.”

For example, if a business requests an advance and either is not approved for one, or doesn’t choose to take it, Wayflyer’s analytics platform is free to anybody who signs up to help them optimize their marketing spend.

“This is a critical driver of value for e-commerce businesses. If you can’t acquire customers at a reasonable price, you’re not going to be around very long. And a lot of early-stage e-commerce businesses struggle with that,” Corbett said.

It also can pair up a merchant with a marketing analytics “specialist” to analyze its marketing performance or an inventory “specialist” to look at the current terms and price a business is getting from a supplier.

“Our focus from the very beginning is really supporting the merchants, not just providing them with working capital,” Corbett said.  

Another way the company claims to be different is in how it deploys funds. As mentioned above, merchants can pay the money back at varied terms, depending on how sales are going. The company makes money by charging a principal on advances, and then a “remittance rate” on revenues until the total amount is paid back.

“We tend to be more flexible than competition in this way,” Corbett said. “Also, some competitors will pay invoices on merchants’ behalf or give them a pre-charged card to use on advertising spend,” Corbett said. “We always give cash into a merchant’s account.” 

Wayflyer recently inked an agreement with Adobe Commerce, a partnership it said would provide a new channel to further amplify its growth with the goal of funding 8,000 e-commerce businesses in the first year of the partnership.

For his part, Left Lane Capital Partner Dan Ahrens said that his firm was impressed by Wayflyer’s “nuanced understanding of what will drive value for their clients.”

“The team’s focus, specialization, and deep analytical expertise within the e-commerce market also drives superior underwriting,” he told TC. “Their explosive growth has not come about by taking on undue risk. We are big believers that their underwriting will only improve with scale, and that Wayflyer will be able to compound its competitive advantages over time.”

As mentioned, this is an increasingly crowded space. Earlier this month, Settle announced it had raised $15 million in a Series A funding round led by Kleiner Perkins to give e-commerce and consumer packaged goods (CPG) companies access to non-dilutive capital.