ApplePie Capital gets $16.5 Million in Series B, $180 Million in Loan Capital
Some 71 percent of millennials would rather visit the dentist than just listen to a message from a bank. And anyone that has slogged through an SBA loan application might happily sign up for a root canal instead.
In that extreme distaste for banks, ApplePie Capital founder and CEO Denise Thomas saw an opportunity. “It’s the way the world is going. If I can do so much on the Internet, why can’t I do my financing?” pondered Thomas, who founded and self-funded the financing source in 2014 by packaging franchisee business loans for institutional investors.
A couple rounds of funding and a couple years later, the company has funded more than $55 million in loans and returned $4 million to investors.
And today, ApplePie got a fresh infusion of $16.5 million from QED Investors and Fifth Third as well as a $180 million loan purchase agreement from TowerBrook Capital Partners, the company is surging further forward in the franchise space.
The new round of funding may also help ApplePie accelerate ongoing plans to become a complete lending solution for franchise operations.
“What’s exciting is that we will have the runway to do some interesting things around our long-term vision and strategy which has always been to be a full lending solution for brands,” said Thomas, who said new products were in the pipeline already. “If you imagine the future, where were doing loans but we’re also other services that are integrated that just begins to streamline and makes life easier—and also provide more favorable programs to the borrowers because of the bank relationship.”
Frank Rotman, a founding partner QED Investors said ApplePie something special, even among fintech companies.
“We’re big fans, we’ve been with them since formation. When we get involved when a company is forming, it has to be a pretty special company,” said Rotman. I’m a big fan of zero-acquisition cost channels, when someone hands you a customer because it solves a problem for them, that’s a fantastic business. There aren’t many businesses that can actually businesses that can actually deliver on the promise of a zero-acquisition cost channel.”
Thomas was quoted in a press release for the new funding round that it’s not just good for ApplePie or its investors, the streamlined approach to funding that fintech offers empowers brands too.
“At our core, we are a growth delivery system for the franchise industry,” said Denise Thomas, ApplePie CEO and co-founder in a press release. “We unlock value for our franchise brand partners by providing capital to their franchisees, which helps brands grow.”
There’s a lot to fund too, even sticking with a select few franchises as ApplePie does, it’s a massive market and a major problem solver for franchises stuck in the gap between an initial loan and a traditional bank’s requirements.
“The space itself is $30 to $40 billion of new franchisee opportunities a year, and then you have all the refab-refits, which it’s a little bit unknown how big that is, but it’s another $20 to $30 billion,” said Rotman. “It’s not a small market. You add that up, that’s a $60 billion a year opportunity.”