Berlin-based fintech topi has raised $45 million in a new financing round aimed at supporting the launch of its hardware subscription service. Ultimately this gives businesses better access to hardware from the procurement decision to after-life management while simultaneously enabling merchants and manufacturers to offer their products as-a-service.
Running a business has never been an easy task. If it were easy, everybody would do it. And given of late, running a business is getting trickier and trickier by the day. In so much, companies are becoming increasingly, shall we say, creative with just how and where and when and why they're laying out the expenditures.
In early August of 2021, S&P Global Market Intelligence, reported, "The world's 2,000 largest nonfinancial companies by capex will spend $3.7 trillion.” That's $3.7 trillion before the market took a dive, crypto winter set in, Russia invaded Ukraine, supply chain shortages got even shorter, and the list goes on and on.
What topi is offering is a brush to that creative accounting canvas by converting a capital expenditure into a monthly operating expense via a subscription-based transaction.
So instead of buying a fleet of that shiny, new Mac whatever-the-flavour-of-the-week-is for the graphics team, businesses are able to subscribe to a service that provides and maintains them. When an upgrade comes out, the question of outdated technology is moot, as businesses simply swap out the old for the new. And moreover, put it in the hands of professionals that can repurpose or dispose of it properly.
"The as-a-service models that have long been established for software will also become the standard for hardware,” explained topi co-founders Estelle Merle and Charlotte Pallua. “Our subscription platform will ensure businesses’ liquidity is protected, while employees never have to work with outdated equipment again. We strongly believe that every reseller and manufacturer will need to offer their products through a subscription model in order to stay competitive.”
From where I'm sitting this sounds great! So why isn't every retailer offering this service? Well, what we haven't seen yet is what's happening behind the curtain. Risk, fraud management, refinancing, monthly billing, the managing of outdated equipment, the ability to provide insurance products, and the list goes on, are all inherent complexities in the hardware subscription game.
Effectively, what topi is doing is taking the curtain and all the complex moving parts behind it, off the table for merchants. With the ability to embed the topi-powered subscription option in the sales flow, B2B merchants gain access to a completely new revenue stream, while topi handles the vetting of qualified buyers, all in the blink of an eye.
And this isn’t just some snazzy idea sketched on the back of a cocktail napkin; topi is coming out of the gate with its hardware-as-a-service offer hand in hand with GRAVIS, one of Germany’s leading electronics retailers.
“This is a total game changer for us. We have been looking for a partner like topi for a long time,” says Jan Sperlich, managing director of GRAVIS. “We are very excited that our business customers can now easily subscribe to their IT equipment in real-time at the point of transaction, without tedious processes and bureaucratic paperwork.
Founded in 2021, topi has grown to a 35-person strong team representing some 14 countries and is comprised of Revolut, PayPal, GoCardless, Checkout.com, N26, McKinsey, BCG, and Meta alumni.
topi's $45 million round is comprised of a combination of equity and debt. The equity portion of the round, $15 million, was co-led by existing backers Index Ventures and Creandum, with the $30 million in debt funding arriving via TriplePoint Capital. topi founder Charlotte Pallua reports, "Some new angels joined us in this round and our existing angels continue to back us."
“We believe that topi will be one of the driving forces in reshaping the world of B2B payments,” commented Creandum’s Simon Schmincke. “The idea is innovative, fills a void that has existed for far too long, and provides benefits for all sides. In the end, it will all be about execution. And to that end, topi has put together an incredible team that we rarely see in companies at this stage.”