E-commerce loan startup Wayflyer confirms $1B deal from Neuberger Berman
Wayflyer has announced that it secured $1 billion in funding from investment management firm Neuberger Berman. The financing comes as an “off-balance sheet program,” which allows Wayflyer to keep certain assets and liabilities off its balance sheet. This move is expected to help the company maintain a low debt-to-equity ratio. Wayflyer will purchase up to $1 billion in assets from Neuberger Berman-managed funds over an unspecified period. The off-balance sheet nature of the deal is expected to result in more favorable terms for Wayflyer.
According to Wayflyer co-founder and CEO Aidan Corbett, e-commerce businesses are increasingly seeking reliable funding solutions, especially in the U.S. market. In a recent statement, he highlighted their proposition’s power, success, and resilience, as demonstrated by the $1 billion off-balance sheet purchase of assets from Neuberger Berman. This acquisition will provide the necessary capital to ensure their e-commerce customers can thrive in economic conditions.
As mentioned in prior coverage by Ingrid Lunden, Wayflyer is a Dublin-based company that provides revenue financing to e-commerce merchants using data analytics and repayments based on a company’s revenue activity. Since its inception in September 2019 by Corbett and Jack Pierse, Wayflyer has been helping its customers by providing loans ranging from $300,000 to $400,000. These loans cover essential costs such as inventory purchases, shipping, and other big-ticket items necessary for an e-commerce business.
Wayflyer utilizes various data sources, such as Shopify and Woocommerce, TrustPilot reviews, Google Analytics, and other shipping service information, to aid in loan and repayment decisions. According to Corbett, this gives Wayflyer a predictive edge, as the platform can anticipate future financing troubles for merchants.
Wayflyer has experienced significant growth since its establishment four years ago, with over 3,000 customers utilizing its platform and over $2 billion in loans deployed. According to Corbett, most, or over 80%, of Wayflyer’s clients return for additional financing after their initial funding deals are complete.
The e-commerce industry has been unstable recently, and Wayflyer has not been spared from its challenges. Research conducted by Forbes, Huffington Post, and Marketing Signals revealed that about 90% of e-commerce businesses fail within the first 120 days of their launch, mainly due to poor marketing performance and a lack of visibility on search engines. Despite this, Wayflyer’s investors have not lost faith in the company’s approach, as evidenced by their renewal of a $300 million debt line from J.P. Morgan in June. Neuberger Berman’s managing director, Zhengyuan Lu, praised Wayflyer’s model and experienced team, stating that the global e-commerce sector is expected to continue increasing.
Morgan Stanley shares one person’s optimism about the e-commerce sector, which predicts it could grow from $3.3 trillion to $5.4 trillion by 2026. This growth is expected to result in e-commerce accounting for 27% of all sales within the next three years. Although Wayflyer is not currently profitable, CEO Aidan Corbett plans to use the $1 billion from the recent deal to continue expanding the company’s presence, particularly in the United States.