There are multiple success stories for numerous startups that made it big. However, to do so, most companies raise substantial funding, which usually leads to giving away equity to investors in return. The Polish finance firm Booste is offering an alternate option that can mitigate equity loss with revenue-based financing. The company has secured €12 million funding in its Series A round and will soon be expanding its services to the UK and Europe.
Funding details and expansion plans
The latest funding for Booste was led by DialCom24, a well-known fintech company from Poland. The funding will enable Booste to grow its 15-person team further while expanding and scaling up its platform to reach more businesses across Europe.
In a conversation with UKTN, a Booste spokesperson reveals more about the company, what they are aiming for, and more. The first piece of info being their international expansion, which starts with the UK, Ireland and the Netherlands and will expand to other regions later.
Flexible financing for companies
The unique offering by Booste is basically it’s revenue-based financing (RBF) option. This is touted to be a different approach wherein companies can rely on RBF instead of the traditional bank loans that require credit checks and personal guarantees or venture capital which could lead to equity loss. Instead, Booste says a business can access funds when needed and pay them back depending on their revenue income. The company currently has a particular focus on e-commerce businesses, especially since the pandemic has also significantly boosted the sector.
So, how does the RBF option work? As per the spokesperson, companies take a loan from Booste and pay back a fixed percentage of their monthly revenues until the full loan is repaid, along with a 6% flat fee for marketing activities or a 9% flat fee for inventory. “Customers have the flexibility to choose their own repayment schedule, defining what percentage of revenue they would like to direct towards repayment (typically between 5% to 20%),” the spokesperson notes.
Boost notes that the provided RBF is meant to be used by companies for growth activities. These include actions such as buying digital ads, marketing campaigns or inventory spend. The spokesperson adds, “Customers connect their e-commerce and marketing accounts, such as Shopify or WooCommerce, and then Booste analyses the read-only data to create a bespoke offer in less than 24 hours. If accepted, the company will receive the funds in one day.”
Who is eligible?
It is important to read the fine print when going for any form of financing, and the same holds true for RBF as well. One of the questions our readers might have is, who is eligible to apply for RBF? Booste notes that companies need to submit six months of operating history and sell through platforms like Shopify to apply for funding. After that, the company connects with their platform for accessing the read-only numerical data to generate an offer. This is how they determine if an applicant is eligible.
Speaking on how repayment works, the spokesperson explains, “The repayments can be adjusted depending on revenues. For example, say a company borrows £10,000 from Booste and they choose to repay 10% of their revenues per month. If their revenues are £1,000 one month – they will pay back £100. If the revenues are £2,000 the next month, then they will pay back £200. And so on, until they pay back the full £10,000, plus a 6% or 9% flat fee, which in this case would be £600 or £900.”
With the latest funding, Booste is not only focused on expanding its services. It is also build a content library to provide entrepreneurs with the tools and knowledge that can help scale their businesses. This includes webinars, resources and partners. All this content is said to be localised in different languages so that Booste can help companies across Europe and the UK.