Style Arcade turns early success into a runway for growth
With an expanding customer base with a steady flow of recurring revenue, Style Arcade's founder needed money to grow but she wasn't ready to relinquish control.
Use of funds:
Drive new customer acquisition
Invest in product innovation and development
Make strategic hires for sales, marketing, & engineering
Lighter Capital Funding
Increased revenue 180% in 1 year
Expanded to markets in U.S. and Europe
Gained traction without equity dilution
Growth & Achievements
Did you know that e-commerce businesses can bolster their profit margins by 20% to 30% by optimizing the range and volume of sizes they stock?
This is just one of many data points that inspired founder and CEO Michaela Wessels to create the fashion software suite Style Arcade. Headquartered in Sydney, Style Arcade offers digital range planning and fashion analytics solutions to help retailers scale growth in revenues and profits.
Wessels launched Style Arcade in 2018 alongside a savvy team of fashion and retail experts whose knowledge and personal connections immediately attracted a strong customer base.
Even with the wind at their backs, Wessels’ goals were ambitious. She knew they needed capital to hit aggressive growth milestones, but she also recognized the time and focus that traditional fundraising would siphon from the business, not to mention the ownership and control they’d give up. The cost was simply too great at that pivotal early growth stage.
Financing over fundraising
Style Arcade had a rapidly growing customer base with a steady flow of recurring revenue. When Wessels explored revenue-based financing with Lighter Capital, she knew it was the perfect way to turn her company’s early success into cash runway.
Scaling growth with revenue-based financing
Over 12 months, Wessels secured three rounds of non-dilutive revenue-based financing to broaden the business and add features and benefits to the software platform.
Thanks to that financing, Style Arcade:
Made strategic hires for sales, marketing, and engineering;
Invested in marketing and advertising to drive customer acquisition;
Expanded to markets in the United States and Europe; and
Improved and augmented its product offerings.
Traction without dilution
Wessels got more than money to invest in expanding the business; both she and her executive team got valuable time to focus on their customers and improve their product, instead of spending months bogged down in fundraising efforts.
The traction they gained is a testament to Wessels’ winning funding strategy: Style Arcade grew an astounding 180% in one year. Additionally, Wessels preserved the young startup’s share value by raising capital without diluting equity — a decision the team expects will pay dividends in the near future.
As a result, Style Arcade:
Invested time into the business, rather than chasing funding sources;
Grew more than 180% year over year; and
Prevented dilution of equity, preserving share the value.