Swedish startup lender ArK Kapital raises an additional €15m at 3x uplift
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Loading... - Audrey Davis
- 06 Sep 2022
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Debt financing for startups is set for a record year in Europe. Founders have lots of choices — including Swedish startup ArK Kapital, which has in less than a year managed to raise a substantial pool of money to lend to founders. Now ArK is ready to pick up the pace even further.
Today it’s announcing a follow-on raise of €15m at a valuation three times higher than it had at its seed round six months ago. In total the startup has raised €30m in equity and says it now has €300m available to lend to startups.
What does ArK Kapital do differently
ArK Kapital offers loans of €1m-10m to European startups, with terms based on future revenue projections. Unlike most debt providers, ArK’s loans can last up to seven years. Repayments also don’t start for two or three years.
Unlike revenue-based financing (RBF) startups, which predominantly lend to SaaS and ecommerce companies, offering capital in return for a percentage of future sales, ArK plans to work with all kinds of early-stage tech companies that have high growth potential but aren’t yet profitable.
Venture debt can be an attractive complement to VC funding because, unlike VC, it doesn’t require giving away ownership in the business.
How is ArK able to project future revenue among lenders?
ArK analyses potential borrowers, based on engagement data (like product usage, brand and marketing engagement, support engagement and success engagement) and relevant market data to estimate when a customer will become profitable, when it will require a capital injection and how quickly it can reasonably repay a loan. That data is then used to decide whether a loan is possible and what terms ArK should lend on. Read More…
