Wayflyer co-founder Jack Pierse looking to finance more Australian e-commerce start-ups

This global executive says ‘everyone and their mother’ started an online store during Covid, with a market correction set to ensue.

Wayflyer co-founders Jack Pierse (L) and Aidan Corbett (R). Source: Supplied.

The market can expect a number of e-commerce businesses to fail off the back of the pandemic-related boom, according to the co-founder of revenue-based financing platform Wayflyer, which has just signed a deal for $US300m in debt financing from banking giant JP Morgan.

The Dublin-based Wayflyer, which itself was most recently valued at $US1.6bn ($2.25bn) in February, has provided financing to the likes of Airwallex and Laybuy in Australia and is now scouting for more local e-commerce businesses to partner with and provide finance to.

The company launched in Australia in September 2020 amid the pandemic, and Wayflyer co-founder Jack Pierse said that the rest of 2022 will likely bring pain for underperforming businesses in the highly competitive online sector.

Globally e-commerce businesses boomed during the pandemic, with lockdowns and other restrictions driving shoppers online at record numbers, but Mr Pierse said the market can now expect a correction as online shopping activity and consumer confidence recedes.

“Everyone and their mother set up an e-commerce business through the pandemic, and what that’s meant is a lot more competition,” he said. “It’s become more expensive then to advertise on Facebook, Instagram and TikTok, which has been to the detriment of everyone to a certain extent.

“Over the last few months we’ve seen consumer markets drop off and I think some e-commerce businesses will fall away and not make it, and that’s not necessarily a bad thing. It will allow those people who run profitable, efficient e-commerce businesses to become more profitable again, and the best businesses will benefit.”

Mr Pierse said Wayflyer offers funding that is more flexible than traditional venture capital funding, and that his team understands e-commerce businesses better than their rivals.

E-commerce businesses use funding from Wayflyer to buy inventory and marketing, and Wayflyer’s software plugs in to the business’ sales platform and Google Analytics data to determine how efficiently it’s selling, and where improvements can be made.

“Australia has always had a very entrepreneurial culture, and there are a hell of a lot of e-commerce businesses based there, maybe it’s because you’re quite a fashionable country, I’m not sure what it is,” he said.

“In Australia today we have 27 people and we have financed a little over 200 Australian businesses with more than $100m in financing, and with the JP Morgan facility now we’ll be able to drive more financing to a lot more businesses.

“Providing financing has a flywheel effect, when we give good companies financing, we get paid back, and then places like JP Morgan give you cheaper financing, then you can give more companies money, and as long as you keep making good decisions then money becomes cheaper and you can give out more of it.”

Wayflyer is looking to deploy funding amounts of anywhere between $10,000 and $20m, Mr Pierse said, so e-commerce businesses of any size can benefit from the capital on offer.

“If you think about Shopify as the front end of an e-commerce business, they’re helping you build you store and process payments, well we’re ultimately trying to build everything out around the back end,” he said.

“We’re helping you find your products, whether they’re in China or Vietnam or wherever they may be, finance those products, ship them to the States or Australia, and ultimately build products that help you advertise in a more efficient way.

“The back end stuff is what we want to build and we‘re hoping it will be a pretty big business.”

Originally published as Wayflyer co-founder Jack Pierse looking to finance more Australian e-commerce start-ups