Fueling growth with flexible, non-dilutive capital.
Founded in 2009 by former Amazon executives, Ideoclick is a Seattle-based company that offers an innovative platform to help businesses sell on Amazon and other e-commerce channels. The company provides technology and services to help their brand partners maximize opportunity in a digital environment. To date, they have helped hundreds of brands achieve transformative results.
Here’s how they were able to accelerate their platform with the help of Riverside Acceleration Capital.
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Modern companies require modern funding
When we first came across the Ideoclick team in late 2018, they were looking to raise their first significant growth capital. The company had been primarily bootstrapped up until this point, and while the company was profitable, the leadership team was looking to ramp their sales and marketing efforts, aiming to take advantage of the traction to date and accelerate this growth.
According to our conversations with Ideoclick’s leadership, they were not in favor of a large growth equity round, favoring a more rightsized financing for their capital-efficient platform. Also, having not raised much equity to date, the team preferred a non-dilutive option. They had identified working capital loans as an option, but found the model misaligned with their business given that they wanted to raise capital to invest into growth. It’s a sentiment we hear often as many software-centric businesses lack the hard assets required to secure a larger traditional loan and require a more flexible payment schedule that ebbs and flows with their monthly cash flows.
For RAC, when we looked at Ideoclick, we didn’t focus on their asset-base. We instead saw an innovative tech company with nine years of organic growth, a proven business model, a loyal customer-base, and a strong leadership team.
We were able to provide them with an initial investment, structured as revenue-based financing, which offered Ideoclick a more tailored capital solution: non-dilutive financing without restrictive covenants or personal guarantees that would be paid over a longer time horizon, in part as a percentage of their monthly revenue. This model allowed the company to re-invest more of its initial cash flows and prioritize sustainable growth and longer-term initiatives.
The right amount of capital, at the right time
For Ideoclick, it wasn’t just about finding the right funding model. It was also about securing the right funding amount. Over the prior nine years, they had demonstrated that they could grow their business with minimal outside investment. Through our conversations, it became clear that they were keen to continue the same prudent decision-making that had taken them this far, while investing into growth to accelerate the business and preserving the flexibility to take out more capital down the road.
To this end, we arranged a two-tranche investment, where Ideoclick could secure the initial capital it needed and be able to draw additional funding over the next quarter.
With the new funding, Ideoclick was able to focus on continued sales execution and product development, which ultimately helped the company grow revenue and then raise a $7M Series A one year later to further invest into growth efforts.
Case study should not be relied upon for investment decision making and should not be considered an offer or solicitation of securities or investment services. For informational purposes only and intended for General Partners or Management teams considering partnering with The Riverside Company. Portfolio company selected based on non-performance criteria
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