If you’ve been playing along at home, you might have noticed my on-the-fence stance regarding the whole revenue-based financing craze. When the announcement of what I perceived as yet-just-another-rbf-player hit my desk at the end of March, “le sigh” might have passed by my lips.
Digging into what Stockholm-based Ark Kapital was/is proposing did sway my opinion. A bit. Instead of the cookie-cutter method we’ve seen replicated time and time again, Ark is using AI to evaluate a startup as a whole, not just ARR or MRR numbers to better provide a complete risk assessment before doling out anywhere between €1 million - €10 million.
Ok, so they’re not looking at just ARR or MRR, big deal right? Maybe so, but the kicker here is the AI they’re using. This isn’t some off-the-shelf AI, this AI is developed by the same chap that created and led EQT Ventures’ Motherbrain project, Henrik Landgren.
As far as the available capital goes, here’s where things get a bit confusing. Allow me to clarify.
At the end of March, Ark came out of the gates announcing a €165 million raise. €15 million of that came in the form of equity led by LocalGlobe (now a part of the Phoenix Court Group) with Creandum, Ilkka Paananen, Christer Holloman, Sebastian Knutsson, Jacob De Geer, Hjalmar Winbladh, and Patrick Söderlund all contributing.
€150 million arrived in the form of debt funding provided by Pollen Street Capital, which for legal reasons I won’t even pretend to understand, couldn’t be named at the time. And yet, less than a month later, decided to issue their own release naming themselves as the providers. Pure speculation, but perhaps something to do with this?
Right. Now with that mud out of the way, it would appear that I’m not the only one who’s thinking that Ark might be onto something special here, as they’ve now secured an additional €150 million from “another bank”, thus increasing the available resources to European founders to a respectable €300 million.
This "other" bank is rumoured to be hailing from Sweden, where the biggest three are Swedbank, Handelsbanken, and SEB. Of interest, Ark Kapital's CFO, Julia (von Mecklenburg) Ehrhardt worked with SEB between March 2007 and October 2018. 🤔
I’d also like to think that Ark Kapital’s CPTO Henrik Landgren’s thoughts on weathering out the storm, or raising the sails for controlled growth Tech.eu ran last month might have had something to do with this “other” banks’ decision to place their faith in the stockers from Stockholm.
As for what this ultimately means for both the company and the founders it supports, Landgren commented via email, “We are gearing up for a massive scale-up of geographies and financial products for all founders. Stay tuned.”
And on a side note, Ark clearly knows how to celebrate Carnival. Peep those custom-made ice cubes at 0:09.