Axios Pro: Retail Deals

November 09, 2022

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Happy Wednesday, Retail readers. Let's dive in.

✈️ Situational awareness: FedEx is reducing the frequency of its flights and is parking some of its planes in response to weak demand for package delivery.

1 big thing: Freeing up supply chain cash flow

Illustration of money rolled up and locked with a chain and padlock.  

Illustration: Aïda Amer/Axios

Ampla wants to help emerging consumer brands get better access to capital and fintech solutions, CEO Anthony Santomo tells Kimberly.

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.

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