How tech marketplace Lovd deferred a funding round with Gynger
Lovd is a marketplace that simplifies the process of selling used tech such as laptops, cell phones and smartwatches. It sends sellers a free kit which they can use to pack and ship their items. Lovd tests and cleans the item, lists it on various marketplaces using market data to determine the optimal price, and then fulfills the order once the item sells. Lovd charges a commission based on the selling price, ranging from 25% to 40%.
Securing the software needed to grow without impacting cash flow
Lovd was looking to save money on its purchases of Amplitude, a digital analytics platform that turns user data into meaningful insights, and customer engagement platform Braze. With one eye on a future funding round, maintaining cash flow and preserving capital were high priorities, so the company wanted to avoid paying a large lump sum at the start of their contracts.
Lovd needed a solution that would allow them to access the tools they needed while maintaining capital efficiency.
Flexible financing to optimize resources and stagger costs in critical growth periods
"The savings and cash flow benefits allow us to focus on building Lovd instead of over-budgeting for SaaS."
Lovd applied for financing with Gynger and was approved within minutes. It received a term loan which was unsecured, sat subordinate to all other debt, required no personal guarantees, and didn’t involve warrants, usage requirements or application fees. With this newfound financing, they were able to commit to their vendors’ upfront contracts while still spreading out their costs over time.
Before partnering with Gynger, Lovd’s decision-making process when purchasing a SaaS solution involved gathering as much information as possible, which included hours of research and speaking to fellow alums of the Y Combinator startup accelerator. The company then leveraged this information to negotiate hard with the vendor’s sales reps.
‘But Gynger gave me another negotiating tool, so once we got to the end of the negotiation, I asked what kind of discount the vendor could offer if we paid upfront.’
Thanks to the finance provided by Gynger, Lovd managed to secure a 10% discount and additional usage on a semi-annual contract.
For Lovd, avoiding a significant initial outlay was the main benefit of partnering with Gynger. The company eventually plans to raise Series A funding, but it hopes to postpone returning to what has become a challenging VC market until it can demonstrate profitability.
Freeing up this capital also allowed Lovd to redirect resources to value-added activities. The savings were invested in operational overheads such as sending out seller kits, which include a pre-paid shipping label, storing items and fulfilling orders.
‘The user experience was great. The platform was much quicker and less clunky than a traditional bank. And much simpler.’
To learn more about how Gynger’s ﬂexible ﬁnancing can beneﬁt you, get in touch with our team today.