ArK and Capchase hope to turn debt into new capital


Start-up founders are looking for different ways to raise funds beyond traditional venture capital funding, a trend that has driven demand for alternative funding methods like borrowing.

From today, Scandinavian founders will have access to more of these products with the launch of two alternative lending startups: Swedish ArK Kapital and Spanish-American Capchase.

“VC is fantastic if you fit into that box, but it doesn’t fit very well. Bank loans are really backward, which kind of rules out tech startups. And the fintech lenders that we see have sort of limited transformational scope, ”says Axel Bruzelius, co-founder of ArK.

Alternative loan companies primarily lend to startups in the form of recurring income, which means that startups can receive future income immediately in the form of debt. Unlike venture capitalists, which give founders money in exchange for ownership of the business, founders don’t have to give up their equity when they go into debt.

“VC is fantastic if you fit into that box, but it doesn’t fit very well. “

There are already many startups offering this type of funding, including Pipe in the United States. Even VCs jump into the action; in September, American venture capital giant General catalyst launched a fund to buy future start-up income in the form of debt.

ArK managed to attract three impressive investors for a pre-launch investment for an undisclosed amount: iZettle founder Jacob de Geer, EQT Ventures founding partner Hjalmar Winbladh and Patrick Söderlund, founder of games studio Embark and former executive vice-president. electronic arts. FinTech is also backed by Sequoia Ventures scout program.

Bruzelius and his co-founders, serial entrepreneur Oliver Hildebrandt and former EQT Ventures partner Henrik Landgren, will focus on lending to European startups in the range of € 1 million to € 10 million to start.

“I have only started businesses in the Nordic countries before, so it’s important to have investors who are knowledgeable about building global businesses,” says Hildebrandt, CEO of ArK.

“I think Jacob de Geer, given his background with iZettle recently, is perfect for us. “

From Motherbrain to AIM

Like other startups in the field, data analysis is essential to be able to offer the “right” loans to startups. ArK can draw on the experience of Landgren, its chief product and technology officer and former vice president of analytics at Spotify. He was most recently at EQT Ventures, where he led the development of Maternal brain, EQT’s AI-powered investment platform.

Launched in 2016, Motherbrain uses internal and external data to help identify potential investments for the business and has helped EQT Ventures research companies like Peakon and Handshake.

Having worked with data analytics and machine learning for years, Landgren was frustrated that although big data and machine learning were available, the technology had not been used to deliver businesses in growth in more suitable financing options.

He has now led the development of the Motherbrain equivalent for ArK Kapital – ArK Intelligence Machine (AIM). The artificial intelligence platform analyzes a customer’s raw sales and engagement data, combined with relevant external market data. AIM then applies advanced modeling techniques to estimate when a client will become profitable, when they will need a new injection of capital, and how quickly they can reasonably repay a loan.

It can also share analytics and information with borrowers in a dashboard, to help businesses optimize their business performance.

Capchase launches in Finland, Sweden and Denmark

ArK is not the only lender to make headlines in Scandinavia this week. Spanish-American lender Capchase also announced today its expansion into Finland, Sweden and Denmark.

The company was, according to VCs, one of the most undervalued startups in Spain in 2021. But since launch in Europe in spring and with another increase of $ 280 million in July, it opened in the Nordic countries amid strong demand from customers in the region.

With clients such as Swedish Soundtrack Your Brand (Spotify for Business) and Icelandic anti-money laundering startup Lucinity, Capchase sees an opportunity in the region. Henrik Grim, previously an investor in European venture capital firm Northzone and of Swedish origin, is the European Managing Director of Capchase.

Capchase and ArK both lend their own balance sheets instead of offering a marketplace to match investors with startups, which competitors like German re: cap do.

Another Scandinavian startup lender with a similar model to ArK and Capchase, DBT, made the news last week after raising € 20m. The roundtable was led by Öresund AB, also one of Klarna’s first investors. To date, DBT has lent more than 100 million euros in development capital to SMEs.

While DBT has so far only been available in Sweden, ArK is open to the whole of Europe from the start. With 16 new hires, including former Klarna employees, the aim is to further develop the team in Stockholm and in the regions where ArK gets the best traction.

“When we connect to the data of the entrepreneurs and build the models, we have noticed that it is extremely scalable. The data is the same in Norway, Denmark, Germany and all over Europe, and indeed all over the world. So what we really want to do here is to move forward as quickly as possible and to roll out across Europe from the start, ”said Landgren.

Mimi Billing is Sifted’s Nordic correspondent. It also covers health tech and tweets from @MimiBilling


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