Every business wants to grow; it’s a law of nature. But in order to grow, a business needs money. For ecommerce businesses operating on slim margins, accumulating cash reserves can be challenging. Money that comes in also needs to go out in order to finance the next batch of products. It’s a vicious cycle.
8fig, a “funding for ecommerce” company, jumps head-on into this cycle and breaks it apart by providing “continuous capital injections” to online merchants to support and accelerate their growth.
The company seems to be on a promising trajectory; just last year they raised an impressive $50 million Series A round – yes, even funding companies need funding. Below are highlights from a recent conversation I had with Yaron Shapira, the CEO of 8fig.
How did you come up with your company name?
When selecting a company name, we wanted to focus on our sellers’ goals, rather than on our product or features. Many sellers start their stores with the dream of becoming an eight-figure seller, and that’s a dream that we believe our clients can achieve when we bring them on. Thus, 8fig was born.
From what I understand, the company’s founders come from diverse backgrounds. Can you tell me a bit about that, and how you came together in the ecommerce space?
I met Assaf, our CTO, when we were working together at Mercury Interactive. We later founded Qlarium, a risk platform for supply chain, together, and we worked closely with Roei, who was an investor at Prytek, which was the lead investor in our company. After we sold Qlarium, we saw the opportunity to provide a more flexible, supply chain-focused funding solution and started 8fig.
What is the main differentiator between 8fig and the rest of the equity-free funding landscape?
8fig stands apart from other companies that provide capital because we focus on building out a plan with our sellers, and the plan doesn’t need to stay static – our sellers change their growth plans all the time at no extra cost; we ensure that all of our sellers have a solid plan in place, and we provide the flexibility sellers need to deal with supply chain issues and cash flow challenges.
We don’t give a lump sum, we give our sellers continuous capital – the money they need, when they need it, according to their plan. Our platform serves as a sort of CFO for their business – we optimize cash flow and help support the business when reality doesn’t match what’s in the plan.
There’s a lot of talk now in the ecommerce world about never-ending supply chain hold-ups. What does the post-pandemic reality mean for ecommerce sellers?
Even before the pandemic, the supply chain was never really that reliable. Now especially, ecommerce sellers need to prepare themselves for the unexpected. Having a plan is crucial, but it’s important that their plan is one that can be revised on the go. As hard as we try, we don’t know what’s going to happen in the future, which is why we offer a financing plan that can be adjusted to the unknown.
If I wanted to start an ecommerce business from scratch, what is the single most important piece of advice you would give me?
Make a plan! Once you’ve decided on your platform, product, and positioning, you need to make sure the economics make sense in terms of pricing, costs, and margins. Your plan should be something that is living and breathing, that you can update as you grow.
Can any ecommerce business receive funding from 8fig?
Almost any! We jump into the seller’s journey once they’ve launched a store and have started seeing some traction in their market. This means at least six months of sales data, as well as either $100,000 in revenue over the past 12 months or greater than $8,000 per month over the past three months.
What role does artificial intelligence play in your product?
The AI in our product takes our sellers’ supply chain plans and builds a tailor-made, personalized financial plan that will help them maximize their growth over the next six to 12 months.
In addition, our AI allows us to monitor our sellers’ actual performance and detect anomalies in their performance and original plan. It also is able to detect products that are outperforming and forecast their growth potential, guiding sellers to focus on their products that have the most opportunity.
Results speak for themselves. What are some eye-popping statistics you can share about the impact your product has had on your clients?
Our sellers often have the mindset and ability to grow, they just need to be enabled with the right resources. One of our clients, a young couple selling meditation products on Amazon, achieved 7.4X revenue growth in one year, going from $96,000 to $709,000 year over year, once they started working with 8fig. Another seller went from $500,000 to $3,000,000 in growth in just ten months after working with 8fig – that’s 500% revenue growth.