Shaking up startup financing options, Swedish firm ArK Kapital has just extended its capital pool to €400 million. The fintech company offers non-dilutive loans to help startups grow faster.
Launched in 2021, Swedish company ArK Kapital fuses banking and artificial intelligence, operating as a data-driven precision finance company that enables technology companies to grow faster and smarter through long-term loans – maintaining control for founders and reducing risk for investors.
The tech lender has now extended its capital pool to €400 million and launched into the German market. Last summer, the firm took its lending pot total to €300 million and this update reflects growing popularity and trust in its lending model.
ArK Kapital provides tech companies with access to up to €10 million in founder-friendly and non-dilutive funding. This is combined with its growth forecasting platform, AIM, which generates 5-year cash position forecasts daily and helps to inform growth strategy.
Henrik Landgren, co-founder and CPTO at ArK Kapital: “We’re happy to bring something new, plus access to more capital, to the German tech ecosystem. And given the current macro trends pressuring founders companies to redraw their playbooks and establish a path toward profitability we believe the timing couldn’t be better. Since the founding of ArK Kapital, we’ve seen a growing need for access to capital offered on founders’ terms, with longer repayment periods, flexibility outside traditional equity rounds, and as a complement to venture capital.”
With this extension, the Swedish team are making €400 million available to European tech startups, offering a complement to traditional VC models – which, as we all know, has been under immense pressure in recent months.
Launching into Germany, the firm is tapping into one of Europe’s startup strongholds. It bolsters the nation’s startup ecosystem, but also helps the European ecosystem, by maintaining strength in the continent as a whole. It is a new offering for the German market and will give founders access to non-dilutive founding as well as the AIM forecasting tool.
Mariam Koorang, General Manager for Germany at ArK Kapital: “In Germany, the concept non-dilutive loans to extend runway, optimize for future growth, or master the shift to profitability is still fairly untapped, at least compared to markets like the U.K, a market which historically been responsible for the disproportionate share of debt financing. I’ve seen the pain points of raising capital up close, and finally there’s an unbiased and data-driven alternative to securing access to capital. This means more German tech companies can fuel their future growth, especially in between rounds.”
With AIM, founders simply plug in their growth-related accounts and in return get access to a detailed 5-year forecast – from which they can access customized funding. It’s coupled with the finance product suite which gives access to a transformative, large growth loan that spans between €1-€10 million, lasting up to seven years, with repayments not starting for two-to-three years, completely non-dilutive.
The flow of VC investment has been declining – and in Germany, it’s no exception. While early seed and series A rounds have been less impacted, later-stage tech companies have seen VC investment drop by 56% YoY compared to 2021, the same number for all of Europe is down by as much as 46% for Series C and later-stage funding, according to data from Dealroom.
Meanwhile, in the current financial climate, the credit market is closed off for early-stage tech companies, as banks haven’t been able to properly risk assess companies with not-yet profitable growth.
ArK aims to offer something else and in doing so, it bridges the gap between the credit market and the startup community.
Since its initial launch in the Nordics, ArK has seen significant demand and it’s planning further expansion throughout 2023. The team is backed by no less than seven unicorn founders and a German banking veteran – Frank Strauß, formerly Deutsche Bank and Deutsche Postbank Group, 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.
