A Wilmington fintech will expand in the coming months using a $3 million Series A round backed by Cofounders Capital of Cary alongside existing investors Live Oak Ventures and VentureSouth.
APPROVE is a software-as-a-service solution that allows equipment manufacturers and distributers to integrate financing into every point of an equipment buyer’s process. The company, founded in 2014 by CEO Robert Preville, plans to hire 40 to 50 workers as it looks to expand its headquarters.
“We feel like this is a great community with regards to talent and resources to help us grow our business,” Preville said.
The firm, with a staff of around 20, is bringing on approximately 40 equipment distributors as new customers each month, according to the company. Originations on its platform grew 97 percent year-over-year in the first quarter of 2023.
Preville said the company's technology provides a seamless experience to customers by covering a larger asset class than any individual lender.
“If you partner with one lender as an equipment seller, you may be limiting what you can provide your customers,” he said. “Partnering with all the lenders allows you to have a much broader solution so that you optimize your approval rates with your customers.”
Tobi Walker is a partner at Cofounders Capital and led the deal with Approve. He now sits on the company's board.
“We have hundreds of (original equipment manufacturers) using the tool right now – terrific, terrific growth in the company,” Walker said.
He said that even amid concerns about market volatility, Cofounders Capital’s maintains a focus on key traits for their investment portfolio. In particular, the group invests in what they call demonstrable ROI companies, companies that have a clear demonstrable value to a customer.
“We typically see that those companies that are mission critical and have a demonstrable ROI are a lot more crisis proof or recession proof than others,” Walker said.
He added that a volatile market environment isn’t all bad. With less capital available comes reduced competition, Walker said.
“The other and probably bigger one is, the thing that tends to inhibit growth the most across our companies is hiring really good talent,” Walker said. “And that is simply a lot easier when there is a lot of news around about layoffs from big tech companies and simply just more great talent available in the market.”
Wilmington offers the kind of strong talent pool Approve is looking for, Preville said. He added that larger cities don’t necessarily offer the kind of lifestyle benefits Wilmington has.
“We’re starting to see sort of a migration now of people saying, ‘Work is important, but living is important too,’” Preville said.