Today, Stockholm-based ArK Kapital has announced that John McCormick, former senior managing director at Blackstone, the world’s largest alternative asset manager, has invested an undisclosed sum in the company.
Revealing that ArK is gearing up for a US-market expansion the fintech startups' CEO Oliver Hildebrandt shared:
“John is a legend in the world of finance and was early in pushing the implementation of data at Blackstone, leading to the hedge fund boom we all know today.
“We believe that with his expertise and network, we can accelerate our mission of empowering founders with the tools and funding they need to jet fuel sustainable growth.”
The ArK difference
Back in 2019, a new form of financing was bubbling to the surface across Europe. A mechanism that offered startups non-dilutive working capital in the form of a loan, the amount of which was often determined by ARR figures, most commonly known as revenue-based financing.
The method has proven successful and non. Just a few months ago, one of the original players, London-based Uncapped announced that it would no longer offer revenue-based financing, noting:
“Unfortunately, RBF loans are not the best funding product for high-quality businesses.
The best clients kept growing fast (and accelerated further after they took funding from us!) which meant they repaid loans much sooner than expected.”
However, one such startup leveraging the power and need for the gap revenue-based financing outfits fill in the lifecycle of a startup/scaleup that set out to break the status quo is Stockholm-based ArK Kapital.
Whereas other RBF players have evaluated risk and doled out loans based on MRR and ARR numbers, ArK Kapital uses AI to examine applicants top to bottom, providing a more holistic overview of a company's finances.
Not satisfied with keeping the sauce a secret, around this time last year, ArK offered founders everywhere access to AIM, the company’s AI-driven forecasting platform in order to mitigate risk and avoid unnecessary layoffs.
Rooted in innovation
While AI is seemingly powering everything but the kitchen sink today, it’s worth noting that one of ArK’s co-founders is former Motherbrain lead at EQT Ventures, Henrik Landgren.
"Ark Kapital has pioneered the development of a new asset class tailored for technology companies, employing constantly updated and forward-looking data as the bedrock for crafting innovative loans that pave the path to profitability," said McCormick. "In stark contrast to the early iterations of RBFs, which primarily fixated on singular data dimensions such as cash flow, ArK's pioneering approach is more like 3D, thereby setting a new standard for the industry."
Backed by unicorns
Since 2021 ArK has attracted the backing of institutional investors LocalGlobe and Creandum, several unicorn company founders including Hjalmar Winbladh of Epidemic Sound and founding partner of EQT Ventures, Jacob De Geer of IZettle, Timo Soininen of Small Giant Games, Ilkka Paananen of Supercell, Sebastian Knutsson of King, Riccardo Zacconi of King, and Steve Anavi of Qonto, and a former bank president and now managing partner at a Swiss private bank, Annika Falkengren.
Tech.eu spoke to Landgren at our Summit in Brussels earlier this year.
Lead image via Blackstone