Attention-grabbing bit of stories as we speak from sidewalk supply robotic startup Kiwibot: The corporate introduced it has signed a $10 million financing deal within the type of a sale and leaseback association with Kineo Finance, an asset financing firm based mostly in Switzerland.
In line with firm founder Felipe Chavez, the deal is structured such that Kineo will make as much as $10 million obtainable in financing to Kiwibot, and in return, Fineo will purchase the robots constructed by Kiwi at value and lease them again to the corporate. This association allows Kiwi to have prepared entry to development capital to construct its robots and likewise limits the fairness dilution of a typical growth-round funding.
“It’s a easy sale and leaseback,” Chavez advised Tech Funding Information. “As soon as we manufacture them and ship the robots to their closing vacation spot, we promote them to Kineo at value.”
Whereas that is the primary time that I’ve seen one of these capital settlement within the meals robotics house, it could possibly be an indication of issues to return. As we’ve seen from this month’s information from Picnic, the meals tech {hardware} market is having challenges as extra conventional enterprise investor appetites for big development rounds have shrunk within the present unsure financial atmosphere. Through the use of a gross sales and leaseback deal, startups can get entry to an entire new sort of financing and likewise restrict how a lot of their firm they want to surrender within the course of.
After all, there are additionally downsides to these kind of preparations. Kiwi has to verify they will discover clients for his or her leased robots, as they’ll now have a month-to-month cost to service for the robots within the subject. Kineo owns the robots and if Kiwibot can’t make the funds, the financing firm can do no matter they need with them. Add in different complicating elements just like the lack of tax advantages akin to asset depreciation, and the dialog about whether or not to undertake this new mannequin turns into considerably nuanced.
That mentioned, I applaud Kiwi for locating a brand new and artistic approach to fund their enlargement, and I’ve to assume different meals robotics distributors is perhaps looking at one of these financing association.
