Wed. Mar 29th, 2023

ArK Kapital raises €165 million to offer long term alternative financing options

On the surface, ArK Kapital might look like just another revenue-based financing platform, but the stocker from Stockholm has a few vittles in the storehouse that stand out.Dan Taylor8 hours ago

ArK Kapital raises €165 million to offer long term alternative financing options

ArK Kapital has raised €165 million (€150 million in debt funding and €15 million in equity), now providing Stockholm with an entrant into the game of alternative funding options for startups. 

As the number and volume of revenue-based financing options become greater and greater, it’s nice to see a differentiator joining the pitch, and I’m almost reluctant to include ArK Kapital in this list, as they are setting off on a path of their own, eschewing the cookie-cutter method we’ve seen replicated time and time again.

In case you haven’t been playing along at home, an ongoing table I’ve been casually curating:

NameLocationTurnaround timeRevenue RangePre-requisites
KarmenFrance< 48 hours40% ARR
VittLondon/Berlin< 24 hours100% ARRARR of £100,000
re:capBerlin< 48 hours50% ARR
RitmoMadrid< 24 hoursup to €3 million
RequrAmsterdam< 24 hoursunspecified capMRR of €20,000
ViceversaMilan< 72 hours€10,000 – €1 million
WayflyerDublin< 24 hours$10,000 – $20 millionMRR of $20,000
SilvrParis< 24 hours€10,000 – €10 millionMRR of €10,000
ArK KapitalStockholm< 336 hours€1 million – €10 millionvariable

Now don’t let that 336 hours (2 weeks) number throw you. As stated above, I’m hesitant to include ArK in this list as they offer a refreshing variation: a case-by-case analysis.

Employing self-dubbed ‘precision financing’ ArK uses 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.

But this isn’t just some untested, off-the-shelf AI. ArK Kapital’s chief product and technology officer is none other than Henrik Landgren. The same Henrik Landgren that served close to 6 years as Spotify’s VP Analytics at Spotify, then moving on to partner and Motherbrain lead at EQT Ventures.

If the name Motherbrain isn’t ringing any bells, it should be. It’s EQT Ventures’ in-house AI that helps the firm process any number of investment tasks including deal sourcing and competitor mapping, all tools that could and should readily apply to risk assessment when it comes to signing on the dotted line.

“Once we have all the information we need from the customer, turnaround is shorter than two weeks.  We aim for precision financing, meaning we build every case up from scratch, so there’s not one set of rules. We issue loans from 1 to 10m EUR, with multiples of ARR ranging roughly from 0.5-2, depending on industry and company fundamentals,” explained ArK Kapital COO and former executive at Finnish financial powerhouse NordeaAxel Bruzelius.

Ok, so far so good, how about a little extra juice?

Whereas a number of RBF operators want their money back within 6 to 12 months, a factor that will also determine just how much cash they’re willing to splash on a loan applicant, ArK Kapital is so confident in their AI-powered analysis, that they’re willing to offer repayment terms of up to 6 to 7 years beginning 2 to 3 years after disbursement.AD Summit

“We believe that entrepreneurs should retain more ownership of their companies and more transparency is needed throughout the fundraising process. After all, no matter how small, any investor equates to a long-term relationship,” added CEO and co-founder Oliver Hildebrandt. “This is where the power of an AI-driven approach becomes clear: companies can benefit from tailored financing options based on their potential, backed up by data.”

The equity portion (€15 million) of ArK Kapital’s €165 million seed funding was led by LocalGlobe, with participation from Creandum and angel investors including founders of iZettle, Supercell, King, and EQT Ventures.


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