Gynger: The Stealthy Company that’s Lending Cash to Companies for Tech Purchases – and Raking in the Profits
Gynger, a platform that lends capital to companies for technology purchases, has raised $20 million in a Series A round led by PayPal Ventures, and the industry is freaking out. But is this a game-changer, or just another example of the growing buy-now-pay-later trend?
Gynger, founded by Mark Ghermezian, has raised a total of $31.7 million in venture capital and has closed a $25 million debt facility from Community Investment Management (CIM). The company claims to provide businesses with access to unsecured lines of credit, which allows them to extend their runway and preserve cash. But at what cost?
The company uses advanced artificial intelligence and data analytics to underwrite and approve credit for customers, which means that it can automatically detect technology spend and recommend financing opportunities to best fit the needs of both buyers and sellers. But how accurate is this AI-powered credit assessment, and what happens if companies default on their loans?
Gynger claims that its application process is less than 10 minutes, and companies get credit decisions the next day, with immediate access to funds once approved. But what about the fees? The company charges interest on its loans, as well as loan origination fees, and makes money from buyers through interchange fees and service fees from vendors. It’s like a buy-now-pay-later service for companies, but with higher fees and more risks.
Gynger’s main competitor is Bill.com, a company that offers a similar service but with lower fees and more transparency. But Gynger is gaining traction, with revenue up over 700% year-over-year and a customer base that has grown 5x in the same period.
Gynger’s funding will be used to scale its operations and fund the loans, but the company’s model raises more questions than answers. Is this a sustainable business model, or just a bubble waiting to burst? Only time will tell.
Industry Reacts
PayPal Ventures Managing Partner James Loftus believes that Gynger’s model gives it a "unique advantage" and that the company will be able to drive massive network effects and create deep relationships with its customers. But what about the risks? And what about the impact on the industry?
As the fintech space continues to evolve, Gynger’s model may be seen as a game-changer, but it also raises concerns about the lack of transparency and accountability in the industry. Companies need to be careful when dealing with these types of services, and investors need to be cautious when investing in companies with such high fees and risks.
What’s Next?
Gynger’s future is uncertain, but one thing is clear: the company will continue to disrupt the fintech space. Will it be a game-changer, or just another example of the growing buy-now-pay-later trend? Only time will tell.
