From Alohas to Laagam: the head of the largest e-commerce investment fund in Spain anticipates "bestial" growth in the on-demand fashion sector

The e-commerce industry has received a barrage of interest in recent years, which has accelerated as a result of digitization in the pandemic era.

However, the supply chain crisis has meant a before and after. The challenges are now notable to be able to make deliveries on time, while inflation does not stop taking off, generating uncertainty in the consumer.

Business Insider Spain had the opportunity to interview Alejandro Poveda, head of Outfund in Spain, a company that has become the largest investor in e-commerce in Spain and the United Kingdom, to talk about these challenges, the latest milestones of the firm, as well as where the great opportunities in the sector are currently located.

Today Outfund is the largest revenue-based finance fund in Europe, with 150 million euros to help Spanish e-commerce platforms in the growth phase to grow without being diluted, providing capital for marketing and stock. They are present in Spain, the United Kingdom, the US and Australia and have opened two more markets in November.

“The main line is a financing model based on income, very little known in 2019, when we started”, says Poveda. Giving new funding options makes life for founders as much as possible a little easier.

Nobody wanted to finance his idea and since 2012 he has founded 6 brands and a multi-order app and accumulates more than 20 million euros in turnover

"That, combined with the technology behind it, the algorithms and artificial intelligence that we use daily, allows us to make decisions in just 24-48 hours," explains Poveda. Agility, non-dilution, closeness and competitive prices would be his 4 main lines.

The company seems not to be satisfied with being a leader in Europe, and for this reason now it focuses on a global level. Its goal is very clear: to be the largest revenue-based finance fund in the world.

“We are constantly opening markets and allocating large resources to recruit talent and constantly improve our technology,” says Poveda. “We are very clear that signing talent and taking care of it is the most important move we can make for our future,” she adds.

Outfund, in fact, recently acquired Clicfunds. An operation with which they now have the capacity to help startups, both in the short and long term, to keep at least a large part of their company.

“This is so because we never entered equity, so the founders and current investors will keep their percentage of the company while we help them to

Investment opportunities in the e-commerce sector: companies such as Recambios Endado, Incapto Coffee, Cocunat, Freshly Cosmetics or Midnight Cosmetics

Which businesses are best positioned to grow and, therefore, so much, to invest today? According to the person in charge of Outfund in Spain, the fashion sector, with the model on demand as Laagam or Alohas do. “It can have tremendous and, above all, sustainable growth, since in the end it's not about growing at all costs, it's about growing with meaning,” he explains.

“Especially, more than in sectors, in companies that know how to simplify their entire process and lower their cost from A to Z”, he elaborates.

And in Spain? What companies and startups are doing well and need to be on the radar? Poveda points out that it is really difficult for him to opt for a couple of them. "We are very lucky to constantly talk to companies that are doing very well and that are growing a lot," he specifies.

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“If I had to say, lately the growth of Recambios Endado has caught my attention, also the disruptive business model of Incapto Coffee, avoiding coffee capsules, I also like the last-mile trend of Deliberry and the sector of cosmetics with companies such as Cocunat, Freshly Cosmetics or Midnight Cosmetics”, he affirms.

With the supply crisis that threatens the planet, there are doubts about the harmful effects on electronic commerce and its penalization.

Poveda assures that the world is facing a delicate moment. "We try to see it as an opportunity, we can help many companies to be more proactive with their stock, to order more in advance and to have their stock much more controlled," he explains. "We were just born to try to make life easier with stock and marketing," he adds.

From there Outfund has been helping with stock for Black Friday and Christmas for months and now they are beginning to serve as support for later months.

“It's about being much more far-sighted than before and we can help that early purchase not directly influence the cash of the companies”, says Poveda.

What kind of companies in the sector can best survive an inflationary environment and delivery bottlenecks, then?

In Poveda's opinion, things are easier for those who buy closer to home, but in Spain there is a lot of talent to know how to overcome these great obstacles.

“This has made many companies look for new ways and now they are selling much more and with better margins”, he concludes.