Freeing up cash flow in the supply chain
Ampla wants to help emerging consumer brands get better access to capital and fintech solutions, CEO Anthony Santomo tells Axios.
Why it matters: Small consumer brands, especially in the e-commerce space, face hurdles in securing credit facilities from traditional banks.
- “They're not able to work with e-commerce businesses because accounts receivable on an e-commerce business turns so quickly,” Santomo says, adding that there isn’t a whole lot of collateral to use to leverage from a credit facility position.
What they’re saying: “There's just a certain cost that it takes to underwrite a single business under $200 million. And it's the same cost of underwriting a company north of $200 million,” Santomo says.
How it works: Ampla offers a growth line of credit that allows modern consumer brands to purchase inventory and cover overhead while freeing up cash flow.
- The company also helps brands streamline their accounting and bill payments and offers them a card to use for market-related expenses, Santomo says.
- “There's just a lot of different things that we're able to make available to these companies that they never had available to them and fast,” he says.
The latest: The company acquired Upside Financial this month, becoming the underpinning of a new product that extends payment terms to brands and vendors across consumer product goods companies’ supply chains.
- The acquisition allows Ampla to expand its platform across additional vendors in the CPG supply chain, Santomo says.
- The new offering, Ampla Pay Later, allows brands to go through Ampla to pay manufacturers’ invoices on terms they prefer, typically 30 to 120 days.
Details: Emerging brands often have to pay deposits before production of inventory or pay the whole amount upfront before they even receive inventory, he says.
- “It's equally as difficult for these vendors to get comfortable floating money and letting these companies pay on terms,” Santomo says. “There's just this natural working capital gap.”
What’s next: Ampla has a couple more features to launch around banking, Santomo says, although he declined to give details.
- Ampla’s current product is also being beta tested with a handful of customers for an eventual launch in the public arena in the near term, he says.
The bottom line: “We really want to be facilitating all those payments across the CPG supply chain,” he says.