Buffalo-based Kickfurther, founded in 2014, grew its platform by more than 80% last year.
“We had a banner year last year,” said Sean De Clercq, co-founder and CEO. “We really crushed it.”
He largely attributes that to deploying a new subscription model at year-end 2021 and the state of the current financial market.
The mission of Kickfurther is to fund inventory production, allowing small- to mid-sized businesses to raise money via the web-based crowdfunding platform.
Kickfiurther funded about $58 million in inventory in 2022, an increase from $32 million in 2021. The startup, which moved to Buffalo in 2019 after winning a 43North competition prize, originally used a transaction model where it earned a certain percentage of funds raised on its platform. This worked well at the beginning with early-stage entrepreneurs because of the guaranteed success model. In other words, Kickfurther didn’t get paid unless the platform successfully raised money for the client.
But as Kickfurther grew and the clientele expanded to larger companies, it made more sense to use a subscription model. That way, instead of clients paying a heftier fee because of larger totals being raised on the platform, they pay a flat subscription fee which provides motivation to raise as much as possible using Kickfurther.
“We’re looking at how we can best serve our customers,” De Clercq said.
A subscription model also makes it easier to predict revenue.
Another factor is rising interest rates that propels some lenders to pull credit. So Kickfurther can become attractive to entrepreneurs because it operates “through thick and thin,” De Clercq said.
The business model of raising funds for inventory also makes sense if cash will have less buying power in the future while goods will sell for higher prices, he said.
Kickfurther, which employs about 55, expects to hire a chief risk officer and chief financial officer.
Tisha Hulburd was recently hired as chief marketing officer. She has more than two decades of marketing experience, including working at Next Glass and Utility Service Partners. At the latter, she was there from the business’ sponsor-based startup stage through its exit.
“Having a senior go-getter in the marketing department was the right time for us as we head into next phase of growth,” De Clercq said.
The company is in the process of raising a Series A round. He declined to name the target amount but said funds are committed for over 50%. His goal is for the company to be cash flow positive by early 2024.
