Based out of Berlin, Myos enables fast and flexible financing to prevent retailers from experiencing bottlenecks, allowing them to expand their assortment and grow significantly faster.
Recently, the company has secured €25M funding in Series A round led by Fasanara Capital and Xploration Capital, both funds with deep expertise in digital lending.
Further, Tomahawk.VC and a group of new and existing investors also participated in the round.
The company is planning to use the funding to grow its existing customer base in Europe, expand to the international market, and continue developing its AI-based lending platform.
“We’re a step ahead of traditional lenders because we look at the retail products, not the merchants”, says Nikolaus Hilgenfeldt, Co-founder and CEO of Myos. “With Myos, merchants can quickly receive loans of up to a million Euros, without complex business plans or personal guarantees which are often not available in the start-up phase”.
Idea behind Myos
Myos helps merchants in their startup phase, where they are usually considered unbankable by other financiers.
The Berlin-based company also helps them in their growth phase, where merchants benefit from maximal flexibility due to its collateral-based dynamic repayment approach.
Nikolaus Hilgenfeldt and Benjamin Schickert started Myos in 2018, bringing business experience from management positions at Morgan Stanley, Allianz, Roland Berger, Lendico/ING, and others.
Talking about the idea behind founding Myos, Nikolaus Hilgenfeldt, CEO and Founder, tells Silicon Canals, “We knew each other from our studies at WHU in the 2000s and stayed in touch over the years. The initial idea for Myos was born out of discussions around the working capital need of online sellers as experienced firsthand by our founding partner Sebastian with his own Amazon FBA company. We asked ourselves why it was so hard to get adequate financing as a marketplace-focused online seller by traditional lenders – banks and non-banks alike – and figured out that these lenders largely ignored the cash-generating assets of the potential borrower (i.e. their trading products), and much more focused on lagging borrower-centric data sources like management accounts or bank transactions.”
“This data essentially does not tell you much about the future potential and inherent value of the business in the fast-paced world of marketplace e-commerce. Hence, we built a completely new risk model from scratch, which relies on publicly sourced data from e-commerce platforms and is built in an asset-centric and asset-based way. In a nutshell, you can think of it as a real estate loan or car loan, just for e-commerce products. Our co-founder Ben was initially involved as a potential business angel and risk advisor, but quickly identified the potential of the idea and decided to go all-in with his time – to our great delight,” he further explains.
Myos’ AI-based platform monitors the price of the product, its sales success, and the competition on common online marketplaces. It evaluates risk scores to determine the future sales potential and the value of the financed products to issue loans to merchants.
In terms of challenges, Hilgenfeldt, shares “If you want to establish a risk model in a radically new way as we did, you have to use a lot of first principles thinking and can rely less on industry best practices and ready-made solutions. Hence, developing our credit risk engine and finding great partners to establish the model took a lot of time and effort, and trial and error, but will payout in the long run.”
Revenue model, growth, and retention rate
To date, the company has supported merchants with over €30M in over 1,000 loans. Further, Myos also enjoys a 70 per cent retention rate consistently.
“While still spending €0,- on marketing, we’re growing our loan portfolio consistently 10-20 per cent monthly. In the last 12 months alone we were able to triple the paid-out loan volume from €10M to over €30M. This corresponds to over 1.000 loans paid out to a few hundred online sellers. We’re especially proud of our retention rates of consistently over 70 per cent, meaning a large fraction of our customers stay with us and take a new loan after repayment of a loan. For many sellers, Myos enables growth rates they would not have dreamt of otherwise. They are heavily supply-constrained and require working capital to fulfil the massive demand on online marketplaces for their products,” says Hilgenfeldt
According to Hilgenfeldt, the company expects revenue growth of >100% in 2021 year over year. In terms of revenue model, Hilgenfeldt notes, “We earn money on the interest margin, i.e. loan interest minus re-financing interest.”
At present, the company currently employs 30 people and is hiring across various designations.
Hilgenfeldt shares, “We are currently a team of 30 and hiring in all functions, especially developers, risk managers, account managers, and portfolio managers. For an overview of open positions see also https://www.myos.com/en/career.”
“Our first priority is further improving the scalability and degree of automation of our lending platform. Simultaneously, we’re defining the roadmap for internationalisation. The Netherlands is a pretty attractive market for two reasons: An advanced e-commerce market and a favorable regulatory environment for FinTechs and SME lenders. This qualifies the Netherlands as a great candidate for a beachhead market,” concludes Hilgenfeldt.