Revenue based financing for Belgian e-commerces
E-commerce business is booming! A recent Forbes analysis claims that the global e-commerce market is expected to grow by $10.87 trillion (yes, trillion!) during the forecast period of 2021 to 2025 This translates into an impressive compound annual growth rate close to 30%.
Despite that, it hasn’t been an easy financial ride for a lot of e-commerce companies. One reason being the lack of funding for DTC brands, which isn’t that surprising given some recent failures.
Next to that, you’ll need to pay for your stock upfront. Unless you did a funding round of crowdfunding, you’ll have to get that money out of your own pocket. And don’t forget about all the recent supply chain issues. This means that sometimes, you’ll have to build a big stock. Otherwise, there’s the risk of selling out and losing out on opportunities.
For a lot of younger brands, bank debt financing is often not an option, or only in small sums. Young businesses often have very little track record, and combined with equity readily available, it makes financing to buy stock and covering working capital a big issue.
At dear digital, we often experience that stock financing is one of the biggest reasons that’s holding e-commerce brands back from scaling.
That’s where Revenue Based Financing (=RBF) comes in. I feel like RBF isn’t commonplace in Belgium today - us Belgians often run a bit behind when it comes to things like these. But it’s not a new thing: in fact, Shopify has had its own ‘Shopify Capital’ since 2016 and they already funded businesses for over 3 billion dollar.