Boopos adds to its small business M&A lending pot with new investment
Six months after announcing $30 million in equity and debt, Boopos, a Miami-based lending platform for business acquisitions and growth, is back with an even bigger round, a $58 million Series A, again in a mix of equity and debt.
The latest round includes $8 million in equity and $50 million in debt, Boopos founder and CEO Juan Ignacio Garcia Braschi told TechCrunch. Fasanara Capital, which led the initial seed round, is participating again, this time with Bonsai Partners leading the round and additional participation by Noa Capital Partners. Actyus and K Fund are also in the investor group.
Garcia Braschi started the company in 2020 to cater to business owners, mainly company aggregators, leveraging acquisitions as a way to grow their companies. Most small business acquisitions don’t often qualify for bank financing, and help from Small Business Administration loans can be slow and require personal guarantees, he said.
“For many people, that's just too much risk,” Garcia Braschi added. “They are willing to take the risk of buying a business and being a business owner, but not risking their own assets. So many cases, too, the buyer is not a U.S. resident, which is something that happens with online businesses, and the loan is based on tax returns.”
Boopos qualifies buyers through an application and by accessing their LinkedIn profiles to ensure they have the right skills and track record to succeed in business ownership.
The company is able to underwrite online businesses in less than 48 hours and provides facilities for funding up to 80% of an acquisition under a flexible, revenue-based schedule. And, even though owners might not want to risk their own assets, the company requires them to invest 20% into the deal to have some skin in the game. Boopos charges interest on the loans.
In addition, Boopos works with business brokers to pre-approve their marketplace listings, which has yielded, on average, the ability to close a sale in under 45 days. The company is adding around 100 new Amazon businesses, e-commerce and SaaS listings each month.
In February, the company had 200 qualified buyers on its waitlist, and today, that is now over 500. It also has partnerships with a group of business brokers that are transacting $3 billion annually, including EmpireFlippers, FE International or Quiet Light.
Following the company’s seed round, Adrián Yanes joined as chief technology officer and Sarita Bhatt as chief marketing officer to help Boopos scale to Series B and beyond, Garcia Braschi said. The company now has 25 employees and Garcia Braschi expects to double that in the next 12 months.
Meanwhile, the debt investment will help ensure there are funds to lend, while the equity portion will go toward building Boopos’ team and growing it.
Next up, the company will launch a mobile app, what Garcia Braschi called a “business owner dashboard,” to enable users to explore and decide what businesses to buy. Once they have made a decision and moved the businesses into their profiles, they have a portfolio view of how the businesses are doing in terms of revenue as it relates to valuation and how the debt is going down and is being repaid. Future features will be alerts to businesses that are for sale.
Though Garcia Braschi was not specific, he did say the company’s valuation is approximately double following this round than the previous seed round. It has grown revenue consistently by between 30% to 50% month-over-month since late 2021.
“Our portfolio is performing strongly despite the weaker macro environment and recent layoffs and difficulties or even pivots that competitors are experiencing,” he added. “We have adapted our credit policy and are being more conservative, lending lower amounts and being more selective. Our financing is still useful because M&A multiples have compressed, too, based on our database, at least by 20% to 30%.”