Paperstack

Paperstack is a fintech company that supplies working capital and financial tooling to direct-to-consumer and retail e-commerce brands. Merchants can apply online in under 10 minutes, receive an offer within roughly 48 hours, and have funds deposited into their bank account in the currency of their choice, typically within two days of accepting an offer. Funding of up to $5 million is offered with no restriction on use of proceeds, covering inventory purchases, marketing spend and payroll. Customers can draw capital on demand or set a funding schedule of up to 12 months to align disbursements with capital expenditures. Pricing is a single flat fee, generally 4% to 10% of the amount advanced depending on revenue and deal size, with no origination fees, accrued interest, NSF or late fees.

The company's early product was a business intelligence and bookkeeping platform for online sellers that automated bookkeeping, visualized cash flow, and supported supply chain and marketing decisions; it was distributed in early access via the company website and the Shopify App Store, positioned as a "fractional CFO" for merchants. An initial offering aimed at freelancers covered expense tracking, tax deduction discovery, GST/HST remittance and annual return preparation. The business subsequently centered on revenue-based financing, with the company describing itself as building a financial operating system and a private credit platform for consumer brands.

Paperstack states it has processed more than 1,500 funding applications and deployed millions of dollars since launch, and that over 84% of its customers are businesses run by women or founders from diverse backgrounds.

Founding story

Assel Beglinova, originally from Kazakhstan, and Vadim Lidich, originally from Ukraine, both immigrated to Canada as international students (in 2012 and 2013) and met while studying at Seneca College in Toronto; they reconnected through Tea Club Toronto, an online community Beglinova founded for aspiring entrepreneurs. Beglinova worked in financial planning and advising, including as a financial advisor at CIBC and in high-net-worth tax planning and small business lending, and was laid off during the pandemic; Lidich left a wealth management career to teach himself to code and launched several startups. Observing that traditional banks were not built to serve the internet economy and that small business owners lacked financial tools, they launched Paperstack in 2021.

Business model

Paperstack originates non-dilutive, revenue-based working capital advances to e-commerce brands, partnering with capital providers and lenders that supply funding through its platform while its software handles data integration and underwriting. It has also begun partnering with financial institutions to broaden the support available to its customers.

Advances are priced as a single fixed fee repaid alongside the principal, typically 4% to 10% of the amount funded, varying with the borrower's revenue and the size of the request; no origination fees, accrued interest, NSF or late fees are charged.

Traction

More than 1,500 funding applications processed and millions of dollars deployed since launch; ARR surpassing $1 million as of the raise; customers reported growing by as much as 82% year over year; over 84% of customers are women-led or diverse-founded. The Shopify App Store listing exposed the product to a large base of online merchants, and close to a hundred merchants expressed interest following the working capital announcement.

Latest developments

The company markets itself as a private credit platform for modern consumer brands, publishes content on revenue-based financing, wholesale financing and merchant cash advances, and is listed among the indicative investments of private credit manager Star Strong Capital. It has also begun partnering with financial institutions to expand the support offered to its customers.