Fairplay closes $35M in equity, debt to provide revenue-based financing to entrepreneurs


    Financing for Fairplay’s Series A round of funding totaled $35 million. The company intends to invest in the online marketing campaigns of direct-to-consumer e-commerce firms and marketplace vendors across Latin America.

    It is expected to raise a total of $30 million in the capital, including $15 million in equity co-led by Dila Capital and Kayyak Ventures with participation from Speedinvest and Elevar Equity and $20 million in debt headed by Architect Capital. Several existing investors were in the round, including QED Investors, Nazca, and many individual investors, such as Kavak CEO Carlos Garca, Jüsto CEO Ricardo Weder, and ZeBrand CEO Carlos Salinas, who participated in the round. The company has raised a total of $40 million in funding.

    Andrew Devlyn co-founded Fairplay alongside Manolo Atala, also the business’s CEO. The company was established in 2019. In an interview with TechCrunch, he said that small business owners often had to pick between investing money in their inventory, logistics, or marketing initiatives and that making the incorrect decision might significantly influence the company’s success. He went on to say that those who do invest in marketing tend to direct the bulk of their funds to outlets such as Google or Facebook.

    According to Atala, traditional lending choices are sometimes time-consuming and complicated, and they may require a company owner to provide aggressive guarantees. Fairplay offers a sales advance as finance in return for a flat charge and a consistent revenue share until the capital is repaid, making the decision more straightforward for entrepreneurs who consistently generate sales. Instead of giving the money directly to the customer, the corporation pays the client’s service providers on their behalf instead.

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    Aside from leveraging the debt, the additional investment will boost Fairplay’s headcount. Atala anticipated trebling its 38 staff in the following three months.

    The firm works with a diverse spectrum of customers, ranging from small businesses that sell $15,000 per month to giant DTC corporations that sell $10 million per month. According to Atala, the average investment Fairplay makes around $85,000.

    “The majority of the money goes into inventory since the cycle from when you purchase a product to when you begin selling it is around 45 to 60 days,” he said. ” Providing this funding would assist e-commerce enterprises in shortening their sales cycle to minimize cash flow limitations,” says the lender.

    The Mexican e-commerce sector is expected to reach $45 million by 2022, according to Atala, and Fairplay is benefiting from this expansion as well. The third quarter of 2021 was the strongest in the company’s history, with originations increasing by 250 percent over the previous quarter and revenue rising by more than 200 percent. He anticipated two-digit growth in the fourth quarter and a five-fold increase in revenue by the end of 2022.

    QED Investors partner Mike Packer, who is on Fairplay’s board, says the firm is in the heart of a “megatrend” disrupting e-commerce infrastructure throughout Latin America. Atala and Devlyn built expanded their team with a brilliant pool of individuals, developed the product, and tested their hypotheses over the last two years, which he saw in the early stages of Fairplay’s momentum two years ago.

    “We are seeing a current boom that has been accelerated by more than five years into a single year of growth,” Packer said. ” “All of the trade and transactions migrated online, and the infrastructure was weak at a time when the economy was expanding. To make companies function more smoothly, we believe there is enormous potential, and Fairplay is right in the center of it.”

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