Montreal-based e-commerce company Nolk has secured C$1.5 million in a quasi-equity loan. The loan’s provider was BDC Capital’s Growth & Transition Capital division. Nolk will use the proceeds to finance its acquisition of the Loctote brand of anti-theft bags.
MONTREAL, September 3, 2020—Nolk, an e-commerce company based in the Greater Montreal area, received $1.5 million from BDC Capital’s Growth & Transition Capital division before the start of the COVID-19 crisis to finance the acquisition of the Loctote brand of anti theft bags. Since its establishment in 2017, Nolk has acquired seven brands of products sold exclusively online and has succeeded in growing the sales of those products by an average of 68% per year. Nolk is led by a team of experienced and complementary entrepreneurs, including founders Alexandre Renaud and François Arbour. Its approach is based on the integration of sophisticated technology and data science. In particular, it has developed proprietary software to discover the best acquisition targets, called GeniusWire.
BDC Capital’s non dilutive financing was provided in the form of a patient and flexible quasi equity loan. This defers any principal payment to maturity as well as many of the fees, which will be linked to the company’s actual value at that time. These provisions reflect management’s desire to minimize pressure on the company’s working capital during the term of the loan so that it can reinvest its cash flow into growth.
“BDC Capital’s financing solution met the needs of our financial model,” explains Alexandre Renaud, President and CEO of Nolk. “Our plan calls for two years of accelerated transformation during which we will reinvest everything into brand development, at which point our assets will have generated the anticipated profits. This model limits capital dilution early in the life of our business and will enable us to reach critical mass sooner.”
This transaction was led by Alexandre Leclerc, Director, Growth & Transition Capital, at BDC Capital’s Montreal office. “What sets Nolk firmly apart is the experience and skills of its shareholder managers, who complement each other perfectly,” says Mr. Leclerc. “In a very short time, management was able to demonstrate that its formula was capable of generating impressive returns in short order. The advanced integration of technology into their processes and their data driven management style also play a major role in enabling them to track the performance of their brands effectively and find the best investment opportunities.”
Nolk is building a proprietary data and analytics platform used to discover, curate and analyze millions of e-commerce brands across numerous diverse and non-traditional metrics. With this platform, we are able to track broad consumer trends and identify brands with strong breakout potential within each vertical. We use this data advantage to acquire brands with strong complementary profiles to our in-house portfolio and core competencies. Once within the NOLK family of brands, we continue to use a technology and data-first approach to supercharge all aspects of an e-commerce operation from logistics, marketing, product development and customer interaction.
About BDC Capital
BDC Capital is the investment arm of BDC—Canada’s only bank devoted exclusively to entrepreneurs. With over $3 billion under management, BDC Capital serves as a strategic partner to the country’s most innovative firms. It offers a full spectrum of risk capital, from seed investments to transition capital, supporting Canadian entrepreneurs who wish to scale their businesses into global champions. Visit bdc.ca/capital.