Forward to focus on early-stage venture and wind down Forward Advances.
Our mission at Forward Partners has been – and always will be - to give founders their best shot at success. We’ve delivered this vision for the last 9 years through our core business, Ventures, which provides venture capital funding to early-stage businesses with high-growth potential.
In 2020, we saw an opportunity to expand our offer to provide growth capital to an underserved segment of the market - digital SMEs that may not be a fit for high-growth-oriented venture capital - and to share in the upside they are creating.
Forward Advances was a startup set up to do just that, providing an alternative to equity funding through revenue-based financing (or RBF). It proved popular. Over the last two years we have built a brand, sophisticated open-banking technology and a strong team that delivered £14.9m in originations, whilst - crucially for us - helping incredible businesses to grow faster and capture market share.
Two years later, the business environment is very different. Macroeconomic uncertainty and pressures of inflation and rising interest rates have fundamentally changed the dynamics of the businesses we work with. These factors have put incredible pressure on the unit economics of Advance’s core customers – particularly those serving consumers through eCommerce. This, coupled with the low margins necessary to compete, has limited the opportunities for Advance’s future growth - and our ability to offer customers deals that truly help their businesses to grow over the long term. As a consequence, we have taken the difficult decision to wind down the business, commencing today, 24th August 2022. Current customers will be fully serviced for the duration of their Advance.
For Forward, the right choice is to allocate our funding in the best way to help as many founders as possible, whilst providing the best long-term returns to our shareholders. We believe the best way to help more founders succeed is to put our funding into the area we know from long experience holds potential – early-stage VC.
The Group will use the capital conserved to support Ventures in investing in new technology businesses with strong fundamentals and existing portfolio companies that we know and trust. Our forecasts show that a managed wind-down of Advances will reduce our operating costs and lead to a stronger balance sheet over time. We believe that this is the best approach to deliver long-term shareholder returns.
Finally, and most importantly, I want to note the hard work and dedication of our team behind Advances. Startup success is by no means guaranteed. To even have a shot at it, you need a talented team to give it their all. I’m proud to say that they did exactly that. I want to thank every one of them from the bottom of my heart and wish them the very best for the future.
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