Stockholm-based ArK Kapital, a data-driven precision financing company that helps technology startups grow faster, announced on Thursday that it has extended its capital pool to €400M to enter the German market.
The firm acquired an additional €100M, which now totals over €400M in non-dilutive capital. It is accessible to European tech companies as they make the transition to profitability.
Founders and tech firms in Germany now have access to non-dilutive financing of up to €10M as well as growth projections via ArK Kapital’s growth forecasting tool AIM.
A comprehensive 5-year forecast is made available to founders after they plug all of their growth-related accounts into ArK’s machine learning platform, from which they can obtain specialised financing.
ArK claims that its financial product suite offers a sizable development loan between €1M to €10M, with a term of up to seven years and repayments beginning after two to three years.
Henrik Landgren, co-founder of ArK Kapital, says, “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,” adds Landgren.
Bridging the loan market’s gap with the startup community
The amount of venture capital investing in the German tech industry is expected to decrease through 2023.
According to Dealroom, Series C and later-stage financing for tech companies has decreased by up to 46 per cent in Europe, while early seed and Series A deals have been less affected.
Later-stage VC investment has decreased by 56 per cent Y-o-Y for tech companies compared to 2021, according to Dealroom.
Early-stage tech companies have traditionally had limited access to the credit market due to banks’ inability to accurately evaluate the risk of businesses with unprofitable growth.
By bridging the divide between the credit market and the startup community with ArK’s always-connected approach to screening, more businesses will be able to receive financing from a larger group than just venture capital.
Mariam Koorang, GM for Germany at ArK Kapital, says, “In Germany, the concept of non-dilutive loans to extend the runway, optimise for future growth, or master the shift to profitability is still fairly untapped, at least compared to markets like the UK, 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.”
ArK Kapital, which claims to have seen rapid demand for its financial products and frontier growth forecasting tool in the Nordic area, plans on further market expansions in 2023.
About ArK Kapital
ArK Kapital is a data-driven precision finance company that helps startups to grow smarter through long-term loans, maintaining control for founders and reducing risk for investors.
The firm’s aim is to break down financial barriers and empower entrepreneurship by building the “best financing solutions” for tech businesses. ArK’s product offering is available in Sweden, Denmark, Finland, and Germany.
The fintech firm was founded in 2021 by serial entrepreneur Oliver Hildebrandt (CEO), veteran banker Axel Bruzelius (COO), and Spotify’s ex-VP of Analytics and former EQT Ventures partner Henrik Landgren (CPTO).
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