[Hardware] Topi raises $45M to power hardware subscriptions for B2B merchants

[FazzNoth]

A new company is looking to do for B2B hardware sales what a growing number of companies have been doing in the consumer sphere, by making it easier for businesses to pay for equipment in installments through rentals and subscriptions. While companies such as Klarna and Affirm have been pushing payment services that help consumers procure goods without having to pay for everything up front, Berlin-based startup Topi launched out of stealth last December with $4.5 million in funding to do something similar for B2B transactions. At the time, Topi was somewhat vague in terms of what its actual product would be, but the company today announced its first product in partnership with German electronics retailer Gravis, and unveiled a fresh $45 million in equity and debt financing. 

 

-Hardware as a service:

 

At its most basic level, Topi is selling a hardware-as-a-service business model, allowing merchants to rent out their equipment such as smartphones, printers, PC monitors, coffee machines, robotic arms, or whatever industry-specific machinery in which they specialize. While it’s true that many merchants offer financing options already that allow businesses to stagger their payments, this isn’t typically integrated directly into the checkout process and that, effectively, is what Topi is bringing to the table.

 

The problem, ultimately, is that companies can spend thousands of dollars upfront on physical goods that are essential to their operations, leaving them with limited capital for other business-critical purchases. On top of that, products they buy might be outdated or obsolete in just a few years.

In tandem, with businesses across the industrial spectrum tightening their purse strings due to economic pressures, merchants will be looking for new ways to encourage their customers to continue spending money, even if it means on slightly different terms.

 

Topi essentially brings together the various components that a seller might need to offer hardware subscriptions, including insurance, logistics, and refinancing providers, so that merchants can easily build rentals into their existing online channels 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 can decide to upgrade to the latest MacBook model, return the device or pay the remainder of the balance to own the laptop outright. In the future, Topi will also offer Klarna-style 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 that a customer can decide to rent an iPhone at the checkout for a two-year period, while buying a laptop outright. Topi is pitched as a modular platform, so that merchants can pick and choose which elements they want they can select just monthly billing and credit checks, to the full shebang including refinancing partners and insurance.

Additionally, while the Topi branding is prominent at checkout with the inaugural product, the company said that it plans to offer a white-labeled version that allows businesses to include their own logo.

 

Link: https://www.google.com/amp/s/techcrunch.com/2022/08/30/topi-raises-45m-to-power-hardware-subscriptions-for-b2b-merchants/amp/