May 09, 2023
Happy Retail Tech Tuesday, Retail readers.
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1 big thing: Financing startup 8fig raises $140M
8fig, which offers tools and financing to online retailers for supply chain management, raised a $140 million Series B round, co-founder Roei Yellin tells Richard.
Why it matters: The Austin, Texas-based startup provides financing for early-stage e-commerce companies at a time when working capital is limited and expensive.
Details: The Series B includes a $100 million credit facility being provided by Silicon Valley Bank, a division of First Citizens Bank, Yellin says.
- The aim of the credit facility specifically is to deploy more capital to clients, he says.
- It also includes $40 million in equity financing led by Koch Disruptive Technologies with participation from existing investors Battery Ventures, Localglobe, Hetz and the Jesselson family, he says.
- Proceeds from the equity raise will be invested in the startup's growth efforts, particularly its product offering.
- It brings 8fig's total funding to $196.5 million, according to an announcement emailed by the company.
How it works: The idea is to help online sellers with six-figure sales turn into ones with eight-figure sales, Yellin explains.
- Non-secured financing is provided incrementally on an as-needed basis to primarily fund inventory, he says.
- For every $100 lent to produce a startup's goods, 8fig gets $108 to $110 back as the inventory is sold.
- As a result, an online seller's growth is not limited due to a lack of inventory or stockouts.
Zoom in: 8fig's AI CXO technology also makes automated decisions using real-time sales, inventory and supply chain data to help sellers react faster, according to the company.
- The average client has 53 supply chain events in a year that generate about $2.5 million in sales.
- 8fig's CXO consolidates these events into a single business plan, per the company.
Catch up fast: 8fig, which also has operations in Tel Aviv, Israel, was co-founded by CEO Yaron Shapira, CTO Assaf Dagan and CRO Roei Yellin in 2020.