Case Study

A better way to finance brands; our investment in Ampla

Jason Bornstein, Principal

Fall 2021

4 min read

Forerunner became known in the market as an early supporter of paradigm-shifting digital brands, including Dollar Shave Club, Glossier, Away, Bonobos, The Farmer’s Dog, Curology, hims&hers, and Warby Parker. We championed the opportunity for brands to pioneer a direct-to-consumer strategy and to build a personal relationship with the consumer -- two transformative business model innovations that have since become table stakes in the market and the foundation for a cohort of public companies, including Warby Parker, Allbirds, hims&hers, Revolve, Stitch Fix, and FIGS.

The ability to build a digital presence and sell online accelerated the pace at which brands can capture mindshare in the market and build an offline presence in wholesale and owned retail. Digital brands aim to do in years what today’s most iconic brands, including Disney, Nike, and Apple, accomplished over many decades. This trajectory acceleration has brought into focus the challenging cash flow cycles that brands face, and their need for reliable and sustainable working capital to scale.

Over the last decade, the ecosystem and infrastructure for digital brands has matured, with a playbook for launching a brand developing by extension. Brands have Shopify for the ecommerce platform; Stripe for payments; Gorgias, Zendesk and Kustomer for customer service; Klaviyo and Postscript for owned marketing channels; Facebook and Google for paid ad spend; and Yotpo for reviews. When it comes to financing, however, the choices are less obvious. While select brands may continue to take equity and venture debt through the venture capital ecosystem, most brands do not have access to appropriate capital to scale--even though they have attractive unit economics and the potential to grow.

This is why we are thrilled to back Ampla, a company that modernizes B2B financing for the next generation of consumer brands with a flexible, omnichannel approach to lending and a financial platform that specializes in modern brands; Ampla supports these businesses as they grow across distribution channels. Brands deserve a financing and financial platform offering that works for them, and Ampla can be that source of capital and partnership for brands.

Anthony Santomo, the founder and CEO of Ampla, experienced the working capital challenges brands face firsthand as an early employee at Attentive, a leading text marketing solution. Text marketing became more effective than anticipated for Anthony’s Attentive clients and some had to pause text marketing to restock. 

Depending on payment terms, brands can have a cash flow cycle that requires upfront inventory and marketing investment, with a collection of digital and wholesale payments coming more than six months after the initial cash outlay. Add to that the compounding effect of high-velocity growth, and brands often find themselves balancing cash needs without a reliable and sustainable financing partner. This experience inspired the idea for Ampla: Anthony, and his co-founders Jim Cummings and Jie Zhou, recognized the opportunity to lend working capital to brands that otherwise would not have access to the scale and cost of capital Ampla could offer.

If you’re a brand founder looking for capital to invest in inventory and marketing, you might be familiar with Shopify Capital, Stripe Capital, Clearco, Wayflyer, or Settle. While these companies have popularized merchant cash advances (MCAs) with flat fees and persuasive marketing, the challenge for brands is that the flat fees often convert to high APRs and the availability of capital can often be low individual advance amounts–or they are tied to digital revenue only. Ampla fills the gap in the market, leading with a true line of credit that includes omnichannel revenue streams in underwriting, offering founders access to more capital at a lower cost without covenants and warrants. With the line of credit as a wedge, Ampla sits at the intersection of a brand’s finances and is well-positioned to create a complete financial platform built with brands in mind.

To date, the company has partnered with over 200 brands, including Sanzo, Partake, Bev, Hydrant, and SmartSweets. And 59% of the brand founders are women or BIPOC-owned businesses. In this Series A announcement, Ampla is also announcing a $250M debt facility to continue partnering with brands, which the team raised independently from the equity round. We are proud to co-lead Ampla’s Series A with our friends at VMG Catalyst and to partner with Anthony, Jim, Jie and the Ampla team. Together, we will continue building a vibrant ecosystem of enablement offerings for the ambitious and diverse founders inspired to build the next generation of brands.

For more information on how brands partner with Ampla, visit getampla.com

Unique people. Unique approaches.

We’re a diverse team of visionaries and veterans who looked at the VC industry and said: “We can do more.” Together, we’re redefining what VC can be — for consumers who deserve better.

We’re a diverse team of visionaries and veterans who looked at the VC industry and said: “We can do more.” Together, we’re redefining what VC can be — for consumers who deserve better.