Last month, revenue-based financing and growth platform for ecommerce merchants, Wayflyer launched a new product in Australia, Scaler, designed for enterprise level ecommerce brands or large omnichannel retailers and provides pre-approved access to large amounts of capital, at affordable rates.

Wayflyer Australia director of sales, Brian Renvoize explains the funding pressures faced by ecommerce businesses and how Wayflyer is helping alleviate these issues.

“For small to mid-sized ecommerce brands in Australia, there are generally limited options available for financing, especially when compared to other markets such as North America or Europe. For larger businesses there are more options available, however, they’re generally not optimised for the specific cash-flow demands of an ecommerce brand,” Renvoize told Retailbiz.

“A core issue is that many traditional sources of funding still see and analyse ecommerce through the lens of ‘conventional retail’ as opposed to an overlapping but fundamentally different industry. An ecommerce store, for example, will generally have relatively few assets outside of their inventory whereas, a traditional retailer might own a warehouse, a shop front or manufacturing equipment.

“They might also have long-term supplier relationships with established companies and other peripheral or intangible assets that traditional finance providers see as ‘risk-mitigating’. For ecommerce brands, this lack of business assets means personal collateral or security will need to be put up, often in the form of a house or other personal property, to counterbalance the risk appetite of the finance provider.

“This issue is particularly pronounced in the highly consolidated Australian financial market dominated by the big four banks and their subsidiaries. Given our relative population size and geographic isolation, this leads to a lack of home-grown or imported competition and significantly poorer negotiating power for ecommerce brands looking for funding.”

In response to the lack of competition beyond the big four, Wayflyer created its first product, Funder, to give ecommerce businesses immediate access to funding for things like new inventory or marketing spend. Clients range from $20,000 per month in revenue to global brands doing $250 million or more annually. This was then followed by the local launch of Scaler last month.

“From day one, Wayflyer has been focused on a fundamental data driven approach to ecommerce, and we’ve honed that approach over time. There are enough fundamentally strong ecommerce brands out there, and we are in a prime position to provide them with the funding they need with an attractive and more tailored alternative to the incumbent lenders in the Australian market.”

There are other global players in the revenue-based finance space with a small local presence and several home-grown small business lenders; however, Wayflyer, is the only player in the space backed by a tier one bank (JP Morgan) which enables larger amounts and more flexible terms at market leading rates.

“The local introduction of Scaler is opening the door to a more flexible, relatively low-cost solution for larger and enterprise level businesses. Many that would have otherwise gone to a bank for debt financing now have a legitimate alternative source of funding, one that is fast, flexible, equity free and collateral free,” Renvoize said.

“Scaler also gives eCommerce businesses the chance to escape some of the potentially onerous restrictions placed on them by the banks, particularly in the current lending climate. At the same time, all Wayflyer products are simply easier to take on and manage when compared to traditional debt financing or lines of credit offered by banks.”

With Wayflyer growing its product portfolio and expanding brand awareness in the local market, larger Australian ecommerce businesses are seeing the emergence of a viable alternative finance provider that can offer something financially comparable to what the banks can, but with additional benefits.

“Wayflyer has already seen a great response to the Scaler product and a huge uptick in interest for alternative funding in general with many brands coming on board in the last few months.”