outfund Raises £37m to Fuel Online Business Growth

Outfund, a revenue-based finance company dedicated to assisting online businesses in achieving expansion without sacrificing ownership, has secured £37 million in a “late seed” funding round. This investment incorporates both debt and equity, with Fuel Ventures taking the lead, supported by TMT Investment and Force over Mass.

The company intends to utilize these funds to extend larger financial offerings to a wider range of businesses, as well as to develop innovative financial products and expand its team. Furthermore, Outfund is committed to providing £100 million in loans to e-commerce and subscription-based companies over the coming year.

Daniel Lipinski, co-founder and CEO, previously established and sold the logistics platform ParcelBright, and believes that current financing options for online businesses are inadequate. He explains, “[Existing options] include slow, complex organic growth; bank loans that require personal guarantees and potentially jeopardize personal assets; or venture capital, which necessitates relinquishing control and diluting equity. Unfortunately, these alternatives don’t align with the goals of increasing revenue and maintaining equity ownership,” he states.

In response, Outfund aims to establish a more equitable and effective method for online businesses to accelerate growth. Focusing on revenue and performance, and specifically targeting businesses that process online payments, Outfund provides funding ranging from £10,000 to £2 million. To qualify, companies must demonstrate a minimum monthly revenue of £10,000 and have been operational for at least six months. Outfund then receives a percentage of revenue, beginning at 5 percent, calculated with consideration for the anticipated repayment timeframe, though this fee remains constant regardless of the actual repayment duration.

Before providing funding, the fintech’s proprietary algorithm analyzes data from various sources to evaluate a company’s performance and assess risk. “Outfund’s lending decisions are driven by real-time data, ensuring impartiality and speed,” notes the CEO. “This enables us to deliver up to £2 million in funding within 24 hours. By utilizing unfiltered data sources, we also minimize risk, allowing us to offer the most competitive fixed rates with extended repayment terms.”

Regarding its competitive landscape, Lipinski points to Clearbanc, a Canadian company that recently entered the U.K. market. “Being based in Canada presents challenges for them in providing the same level of speed and responsiveness as a U.K.-based company like Outfund,” he asserts. Uncapped is another emerging competitor in the local market.

“Outfund distinguishes itself by offering a single, fixed fee starting at 5%, irrespective of how the funds are utilized. Unlike some competitors who impose higher fees for specific uses, such as inventory versus marketing, we leverage technology to make informed lending decisions and provide the most affordable fixed rates available, regardless of spending allocation.”