Outfund raises £37M: London-based fintech invests in SMEs without asking for equity
Outfund, the fintech company changing the way online businesses raise funds, has announced the close of a £37 million late seed round of capital, including debt and equity. The funding round was led by Fuel Ventures and sees TMT Investments and Force Over Mass also invest in Outfund. The fintech lender aims to provide a faster, fairer and more affordable way for SMEs to raise growth capital.
The pandemic is driving more people to shop online with an expected 19% increase in e-commerce sales and with the “golden retail quarter” upon us, many businesses will need to grow and sell more on the web in order to make huge strides in revenue and profitability. Therefore investing more capital into their inventory and marketing efforts. However, funding is evermore challenging to secure and the traditional financing routes offer an unfair deal to founders and directors – with bank loans offering high compound interest rates (or not lending at all outside government schemes) and VCs demanding greater equity dilution.
Outfund is an alternative financing channel where online-based businesses can get the funds they need faster and easier based on their future revenue projections and on significantly fairer terms.
£2M lending limit
With this investment, Outfund is pledging to invest more than £100 million of lending to over 5,000 businesses in the next 12 months and will increase its lending limit to £2 million. As well as using the funds to lend more to more businesses, Outfund also plans to make investments into new products, such as working capital and revolving credit, and team growth.
Daniel Lipinski, founder and CEO of Outfund, said, “Our approach has been warmly received by the founders and directors so far and now we’re looking at how we can open this up to more businesses and continue to be part of their journey to success for a long time.”
Mark Pearson, founder and managing partner of Fuel Ventures, added, “Daniel and the team are pivoting the model of business funding, rebalancing the scales so that business owners don’t lose out financially while getting the capital they need to supercharge their online business’s growth.”
Filip Coen, Partner at Force Over Mass, said: “Outfund provides SMEs with the short-term financing options they deserve: fast, flexible and on good terms. A modern, digital-first credit provider with automated credit and risk scoring, managed by an exceptional team.”
How does it work?
Company directors seeking capital can apply for finance using Outfund’s simple online application. There is no need to provide business plans and only simple checks are required. Businesses will need to connect their revenue accounts and, with access to this data, Outfund will build a funding offer with the money deployed the same day.
Outfund can deploy between £10,000 and £2 million of funding and is available to businesses that take online payments, have a minimum of £10,000 monthly turnover and have been trading for at least six months.