By Riley Kaminer
2022 was a banner year for business financing firm Boopos. In February, the startup collected a $30 million debt and equity fundraise. Then in September, Boopos raised a $58 million Series A – a mix of $8 million equity, $50 million is debt. Boopos also increased its headcount significantly: from 20 employees in April 2022 to 40 now, five of whom are based in South Florida.
Now founder and CEO Juan Ignacio Garcia Braschi [pictured above] told Refresh Miami that he and his team have their eyes firmly set on more growth in 2023: “We plan to at least triple our volume compared to 2022.”
Boopos provides SaaS and eCommerce businesses with non-dilutive, revenue-based financing. The startup has three main differentiators. Speed: entrepreneurs can get pre-approved within 48 hours and funded within 7 days. Reduced risk: no personal guarantees or dilution. And maximum flexibility: entrepreneurs pay a percentage of revenues until their return cap is reached.
The main ingredient in Boopos’ special sauce, Garcia Braschi explained, is its proprietary underwriting model. That gives Boopos an edge over its competitors because the startup can more accurately assess the potential risk of a particular deal. Boops then assigns an A-B-C risk rating akin to a traditional financial institution’s credit rating system. Boopos’ average loan is $300,000, and its biggest yet has been for $1.8 million.
Since late 2020, when Garcia Braschi founded Boopos, one of the startups major learnings was about the importance of the buyer in predicting the success of the business. “We learned that the business owner has got a lot of impact, even more than the fundamentals of the business itself, in the performance of the business.” That’s why Boopos’ underwriting model analyzes business owners’ LinkedIn profiles as part of its vetting process.
So far, the platform has 10,000 users – potential debtors – 30% of which are pre-approved. The vast majority of these users are people who are looking for a lifestyle business that they can live off of.
“In 2023, we want to get as many users to join our platform as possible,” said Garcia Braschi. “But we want to be very selective in partnering with the right people – so that means lower conversion rates.” He drew parallels between this model and that of an Ivy League college: oodles of applicants for just a few spots, leading to low acceptance rates.
Recently, Boopos increased the interest rates for their loans, in line with the Fed’s interest rate hikes. Apart from that though, Garcia Braschi said that Boopos remains relatively insulated from the current macroeconomic uncertainty.
“Performance is pretty steady,” he asserted. “We were expecting growth and are not seeing it – but we’re also not experiencing a significant downturn.” He said it is currently a buyer’s market, with antsy sellers increasingly willing to cut a good deal to move on from their business.
In December, Boopos closed a $4 million debt line with Spanish bank BBVA. Garcia Braschi expects to be back in the market for funding by the end of the year. This funding will help support the ultimate vision for Boopos: building the investment bank for SMBs.
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