Outfund is the largest Revenue Based Finance fund in Europe. It has 150 million euros to help Spanish eCommerce in the growth phase to grow without being diluted, providing capital for marketing and stock. It is present in Spain, the USA and Australia. To find out a little more about this investment fund, we talked to Alexander PovedaCountry Manager in Spain for Outfund, who explains how it works, how much money they have to invest and how they choose the startups they invest in.
You started in 2019 with the Revenue Based Finance model, or alternative financing model for startups, how has the sector changed since then?
In 2019 we already started with the Revenue Based Finance model, still very little known in Europe.
Giving new funding options makes founders’ lives as much easier as possible. In 2019 we went through a process of educating and familiarizing the founders in the UK so that they really understood what we were doing. Currently everyone knows perfectly well how we can help them and I believe that in 1 or 2 years, all companies in the growth phase will be using this financing option, obviously combined with other options, such as VC, bank, public financing. , etc. But each one of them for its corresponding game. For example, VC will be used to improve technology and recruit talent, Outfund for marketing and stock, etc.
How is the proccess? I mean, how does Outfund work?
There are 3 simple steps:
- You access and you create a user.
- You connect the platforms you use: Stripe, Paypal, Shopify, Prestashop, Amazon and Open Banking.
- You attach the updated financial statements and that’s it. In 48 hours you will have an offer if there is a fit on our part.
What does this operation mean for startups seeking investment? How much capital do you have to “lend”?
For startups, it means having the security of having a partner that can help them in their growth in everything related to marketing and stock. At the same time, it means that there are more companies from abroad, interested in betting on Spanish companies.
In Spain we have the capacity of 150 million euros to invest this year.
How do you see the startup sector in Spain?
More than the sector in Spain, which we see as a beastly potential, what we love is the talent that Spain has. That directly, together with the perseverance that the Spanish have, turns into successful companies over the years. The ecosystem is brutal.
What advice would you give to startups that need capital to keep growing?
That first of all they know well what solutions there are. Later I would tell them to analyze each of them well and see which one is better for their business. After they attack them, preferably with the introduction of a third party. I would exclusively attack those that I believe can contribute the most and can best fit with their philosophy and operation.
Companies that need money for online marketing with good results, from our point of view, do not need a VC to take part of their company and make decisions, they need a Revenue Based Finance model like Outfund. But, if they need capital to sign talent, I definitely think that VC is a very good idea. It is about aligning and that each one serves for what best corresponds.
How do you choose startups to invest in?
Whether or not we invest is determined by the algorithms, which have thousands of intertwined variables. But in summary, we look at 3 factors:
- Vision of the company in a first call.
- Metrics, which tell us a lot about the performance and the team behind it.
- If we can really help you and we can have a positive impact on them in the next 2-3 years.
What funding goals have you set for OutFund before the end of 2021? and 2022?
Our intention is to leave the €150 million that we have in the first year of life of Outfund in Spain. It is true that we would be happy if we left 80%. That would mean that we are helping many companies to grow and not be diluted along the way. We hope to end this year 2021 with around €60 million lent.
Quick Quiz:
- What is the first social network you open in the day? Twitter
- iOS or Android? iOS
- App or website? apps
- In which eCommerce and how long ago did you make your last online purchase? Midnight 00.00. Last week.
- And it was? Shampoo that combines natural and organic ingredients. Led by Marc Ciudad and Nina Urgell.
- Last book read? Never Split the Difference: Negotiating as if your life depended on it by Chris Voss
- Recommend us a fiction series. BlackMirror.
- What website have you come across lately that has surprised you for the better? I really like what they do and how they do it in The Unique Poster and also the concept of Onarc.
- What is your favorite thing to do that has nothing to do with digital? I like to travel and unwind 100% with a well-drafted beer.
- Let’s spin a magic chain: Which acquaintance of yours (from another company) do you think we should interview? Why? Alejo Torrens, Co-founder of Gamestry. They are doing something very interesting and I think it can revolutionize the world of esports in a very short time.
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