The company secured $42 million in equity and credit to expand its working capital offering.
The company was founded in 2020 by Eric Youngstrom, the former CEO of ShippingEasy. You had to log into each individual marketplace to ship at that time. To see orders and figure out how to process them, for example, Amazon, eBay orshopify. ShippingEasy brought all of that together under a single data management platform.
When ShippingEasy was acquired by Stamps.com, Youngstrom saw a new problem arise, that smaller e-commerce merchants couldn't afford to ship an order because their credit cards were maxed out.
The people didn't have the money to complete the order in three days. The standard was set by Amazon.
Youngstrom and his team tried to solve the problem inside of Stamps.com, but couldn't find a good solution, so he decided to leave in 2020 and launch a product that could help merchants.
Onramp Funds came up with a data-driven technology. The company doesn't just look at top-line sales, which Youngstrom believes differentiates his company from competitors, but takes historical sales data to build a sales forecast.
Merchants can take their own capital and use it to resolve the shipping, fulfillment, advertising and inventory cost of goods if Onramp provides working capital from that data. The company charges a percentage of the sales.
Onramp Funds is a web platform. Onramp Funds is an image.
Youngstrom grew up around business owners in small towns and related the need to support local businesses to his mission of providing working capital to small businesses. e-commerce sales in the U.S. are still under 20% of all retail sales, so there is still room for growth.
If we can help the small business owner, we can make the world a better place.
The $42 million equity versus credit line ratio was not provided by Youngstrom. The funding included a group of high-net-worth individuals.
Nine months after launching the working capital offering, Onramp is working with hundreds of customers, some of whom have used the service multiple times. The revenue is growing.
While the credit line will be used for financing small businesses, the equity portion will go to build out Onramp's customer acquisition engine and bring in additional staff in the areas of engineering, product, sales, marketing and client success. The company has 27 employees.
The company is giving more guidance to merchants when it comes to navigating the supply chain.
We plan to be here for the long haul to help these guys, because we are building a really cool business that is finding great success and very early standards.
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