Topi raises $45M to power hardware subscriptions for B2B merchants – TechCrunch
A new company seeks to do for B2B hardware sales what a growing number of companies have done in the consumer realm, by making it easier for companies to pay for equipment in installments through rentals and subscriptions.
While companies such as Klarna and Affirm have pushed payment services that help consumers buy goods without having to pay for everything upfront, the Berlin-based startup Topi sneaked out last December with $4.5 million in funding to do something similar for B2B transactions. At the time, Topi was somewhat vague as to what its actual product would be, but today the company announced its first product in partnership with a German electronics retailer. Climband unveiled new $45 million equity and debt financing.
Hardware as a Service
At its most basic level, Topi sells a hardware-as-a-service business model, allowing merchants to rent their equipment such as smartphones, printers, PC monitors, coffee machines, robotic arms or any other machine. specific to the industry they specialize in. While it’s true that many merchants already offer financing options that allow businesses to spread out their payments, this is generally not built directly into the payment process – and this is indeed what Topi brings to the table.
The problem, ultimately, is that businesses can spend thousands of dollars upfront on physical assets critical to their operations, leaving them with limited capital for other critical purchases. On top of that, the products they buy may be obsolete or obsolete in just a few years.
At the same time, with companies across all industry sectors tightening their purse strings amid economic pressures, merchants will look for new ways to encourage their customers to keep spending money, even if that means on slightly different terms. .
Topi essentially pulls together the various components a seller might need to offer hardware subscriptions, including insurance, logistics, and refinance providers, so merchants can easily integrate rentals into their existing online channels at home. using Topi’s APIs. So, for example, an electronics retailer might offer a €1,000 MacBook Air for a monthly fee of €26.25 payable over three years with a full warranty included, after which the customer might decide to upgrade to the latest model of MacBook, return the device or pay the remainder of the balance to own the laptop. Going forward, Topi will also offer Klarna-like installment payment options for customers who know in advance that they want to own the product at the end.
It’s worth noting that Topi also supports upfront purchases, so a customer can decide to lease an iPhone at checkout for a two-year term, while buying a laptop. Topi is presented as a modular platform, so merchants can choose what they want – they can select only monthly billing and credit checks, at most, including refinance partners and insurance.
Additionally, while the Topi branding is prominently displayed at checkout with the inaugural product, the company said it plans to offer a white label version that allows companies to include their own logo.
Access rather than ownership
A quick glance into the consumer technology sphere reveals a constant transition from ownership to access. This is seen in areas such as music, where subscription streaming services such as Spotify and Apple Music now outweigh physical or download sales. And the so-called circular economy is driving demand for rental of consumer electronics, including smartphones and even car subscription services.
There is evidence of this shift elsewhere in the B2B space as well, with the Munich-based company Klarx specializing in the rental of construction equipment. So it’s clear there’s a move away from ownership, which Topi co-founder Charlotte Pallua said other marketers need to consider if they want to stay ahead of the game.
“If traditional retailers want to stay competitive and not lose their customers to these retailers, they will need to start offering subscriptions as a payment option,” Pallua told TechCrunch.
Pallua previously worked as a strategy and business development manager at Apple in the San Francisco Bay Area, where she led a team exploring the feasibility of hardware subscriptions – Apple has yet to launch such a service. , but reports keep surfacing that the Cupertino company is still looking to bolster its recurring revenue through such subscriptions. Pallua met her co-founder Estelle Merle at Harvard Business School in Boston, and the duo cemented their friendship in Silicon Valley where Merle worked briefly at Tesla during her MBA before landing at German mobility startup Via.
A year after its founding, Pallua and Merle are now ready to launch their business in partnership with Gravis, an Apple Authorized Reseller that has 40 physical outlets in Germany in addition to its online store. Gravis was a key partner as Topi iterated its product through its pilot phase.
“We are delighted that our business customers can now easily subscribe to their IT equipment in real time at the point of transaction, without cumbersome processes or paperwork,” Gravis Chief Executive Jan Sperlich said in a statement. “In our pilot phase, about half of our customers who rented equipment through Topi returned for additional products.”
But arguably more important than all that, Topi isn’t just focused on improving access to hardware or helping businesses cash flow – they see sustainability as an underlying selling point to its product.
“In light of climate change, being sustainable is increasingly important for businesses,” Pallua said. “Used appliances should get a second life or be properly recycled – a drawer full of old appliances should no longer exist.”
Topi’s funding round was $15 million in equity and $30 million in debt, with backers including Index Ventures, Creandum, TriplePoint Capital and undisclosed angel investors.