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Outfund raises GBP37m investment led by Fuel Ventures

Fintech company Outfund has closed a GBP37million 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 as it provides 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 grow revenues and profitability. This means investing more capital into their inventory and marketing efforts.  However, funding is 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 businesses can get the funds they need faster and easier based on their future revenue projections and on significantly fairer terms. 

With this investment, Outfund is pledging to lend more than GBP100 million to over 5,000 businesses in the next 12 months and will increase its lending limit to GBP2 million. Outfund also plans to make investments into new products, such as working capital and revolving credit, and team growth. Today’s seed round means that Outfund is now the UK’s largest revenue-based finance company. 

Outfund’s technology takes the bias out of lending and improves the terms for financing based solely on businesses revenues and performance. It’s advanced algorithm pulls information from multiple data sources to determine how a company performs. It is then able to de-risk the proposition, making it possible to offer cheaper funding with longer pay terms and a flat fixed fee from 5%,the most competitive in the market. 

Daniel Lipinski, founder and CEO of Outfund, says: “As a second time entrepreneur myself, I experienced first-hand the complex, timely and often imbalanced nature of the old-school financing routes. I knew there was another way and so decided to build it. Our ambition is for Outfund to be the place to go to grow your business without compromising your equity or wasting time fundraising. This is why we have spent time developing a way to make the process of securing money for growth easier, fairer and most importantly, faster. Our approach has been warmly received by founders and directors alike and so 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, adds: “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. At Fuel we work with the most ambitious entrepreneurs building market leading companies. Outfund is a perfect example of this – a strong, passionate founding team creating a game-changing venture that is now a leader in its field.”

Filip Coen, Partner at Force Over Mass, says: “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. We are very excited to join Daniel and Outfund on the journey ahead”.

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 and send money the same day. 

Outfund can deploy between GBP10,000 and GBP2 million of funding and is available to businesses that take online payments, have a minimum of GBP10,000 monthly turnover and have been trading for at least six months.

Unlike conventional business loans, Outfund ensures the time taken to repay is based on each businesses’s circumstances and the revenue share agreed, making it very flexible. Outfund’s repayment percentages are set to ensure each business maintains a healthy cash flow in its day to day operations, the better the company does the better Outfund does, so now for the first time the funding balance between a company and lender is equal. 

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