Wayflyer renews $300m JP Morgan debt financing deal

Irish tech company Wayflyer has renewed its $300 million (€278 million) debt financing with JP Morgan, allowing the company to continue to support ecommerce merchants around the world.

The credit line is a renewal of an agreement made in 2022 with JP Morgan. Wayflyer, which provides revenue-based financing and marketing analytics for online businesses, said it has provided more than $2 billion to more than 3,000 online businesses since 2019, and the bulk of that – 60 per cent – has been in the past 12 months.

“For companies like Wayflyer, being able to partner with a bank of that quality is an amazing signal to the market that you’ve entered a new level,” said Aidan Corbett, Wayflyer co-founder and chief executive.

“When you start off and you’re providing financing to businesses, in the early days, the market doesn’t necessarily trust you, so they charge you a lot more money. But once you can show that actually now we have a warehouse line – a lending line Wayflyer can use to finance other businesses – from a tier-one bank like JP Morgan, you’re in a situation where suddenly the market is saying: ‘You’ve arrived at a certain stage, at a certain size.’

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“Our cost of funding at Wayflyer is a lot lower than it would be otherwise. So when you do get access to funding from these banks you tend to get a lot more money, it tends to be a very stable source of funds and it tends to be at a much more competitive cost.”

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Mr Corbett said the terms of the deal were largely similar to those agreed last year, with some added flexibility for Wayflyer. That includes a floating interest rate, which would track rates on the wider market. “If those rates go up, we have to deal with that like everybody else,” Mr Corbett said.

Founded by Mr Corbett and Jack Pierse in 2019, Wayflyer provides ecommerce stores with affordable unsecured loans to allow them to fund advertising and inventory ahead of selling items. It also offers detailed analytics to help clients improve their sales performance. It operates in 12 markets.

The company has continued to grow aggressively, despite rising interest rates. “Over the last six to nine months, a lot of our competitors either left the market or downsized dramatically,” Mr Corbett said. “So any challenges that we had around the interest rate environment actually was made up for with the fact that our competition reduced.”

Consumer demand for Wayflyer’s services has held up in the United States, where the company has the bulk of its business, and in Australia. However, the UK has seen some fall-off in custom, Mr Corbett said. The company plans to concentrate on existing markets for the next couple of years, rather than try to break new territories.

Mr Corbett said trusted partners remained crucial to ambitious ecommerce businesses fulfilling their growth potential, with a huge market opportunity for online merchants, despite the challenging macroeconomic environment.

Wayflyer has seen significant growth since its 2019 founding, and achieved a more than €1 billion valuation – unicorn status in the tech world – in early 2022, making it Ireland’s sixth such firm after it raised $150 million in funding.

But Wayflyer has also been hit by the uncertainty that has plagued the tech industry. In November last year, the company said it would cut 200 jobs from its global workforce of 500 – a 40 per cent reduction in staff – with 70 roles expected to go in Dublin. A further 10 roles were to transfer from the US to Dublin, bringing the net loss to 60.

Mr Corbett said the lay-offs were a last resort, with the company having taken other measures to reduce cash burn before opting for job losses.