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Topi raises $45M to power hardware subscriptions for B2B sellers londonbusinessblog.com

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A new company wants to do for B2B hardware sales what a growing number of companies in the consumer sector have done by making it easier for companies to pay for equipment in installments through rent and subscriptions.

As companies like Klarna and Affirm push payment services that help consumers buy goods without having to pay for everything up front, the Berlin-based startup has topic was secretly launched 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 the actual product would be, but the company today announced its first product in partnership with the German electronics retailer. Gravisand unveiled a new $45 million in equity and debt financing.

Hardware-as-a-service

At the most basic level, Topi sells a hardware-as-a-service business model, which allows merchants to rent out their equipment, such as smartphones, printers, PC monitors, coffee machines, robotic arms, or whatever industry-specific machine they specialize in. While it’s true that many merchants already offer financing options that allow companies to spread their payments, this is usually not directly integrated into the checkout process – and that’s basically what Topi is bringing out.

Topi Payment Methods

Ultimately, the problem is that companies can spend thousands of dollars upfront on physical goods that are essential to their operations, leaving them limited capital for other business-critical purchases. In addition, products they buy may be outdated or obsolete within a few years.

Along with companies across the industry spectrum straining their wallets due to economic pressures, traders will look for new ways to encourage their customers to spend money, even if it means on slightly different terms.

Topi essentially brings together the various components a seller may need to offer hardware subscriptions, including insurance, logistics, and refinancing providers, so that sellers can easily build rental into their existing online channels using Topi’s APIs. For example, an electronics store may offer a $1,000 MacBook Air for a monthly fee of $26.25, payable over three years with full warranty, after which the customer may decide to upgrade to the latest MacBook model, return the device or pay the rest of the balance to fully own the laptop. In the future, Topi will also offer Klarna-style 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 pre-purchase so that a customer can decide to rent an iPhone at the checkout for a period of two years while purchasing a laptop. Topi is set up as a modular platform so traders can choose which elements they want – they can select only monthly billing and credit checks, up to the full amount including refinancing partners and insurance.

Additionally, while the Topi branding will feature prominently at checkout with the inaugural product, the company said it plans to offer a white-labeled version that will allow companies to include their own logo.

Topi: like a Klarna for B2B transactions

Access above property

A quick look at consumer technology reveals a steady transition from ownership to access. This is proven in areas like music, where subscription streaming services from the likes of Spotify and Apple Music now outweigh the physical format or download sales. And the so-called circular economy is driving demand for consumer electronics rental, including smartphones, and even car subscription services.

There is also evidence of this shift elsewhere in the B2B space, with the Munich-based Klarx specialized in rental of construction equipment. So it’s clear that a shift in ownership is taking place, something Topi co-founder Charlotte Pallua said other traders should be aware of if they want to stay ahead of the curve.

“If traditional retailers want to stay competitive and not lose their customers to those retailers, they need to start offering subscriptions as a payment option,” Pallua told londonbusinessblog.com.

Pallua previously worked as a strategy and business development manager at Apple in the San Francisco Bay Area, leading a team exploring the feasibility of hardware subscriptions. Apple has yet to launch such a service, but reports keep popping up that the Cupertino-based company is still looking to bolster its recurring revenues through such subscriptions. Pallua met co-founder Estelle Merle at Harvard Business School in Boston, and the duo cemented their friendship in Silicon Valley, where Merle briefly worked at Tesla during her MBA before joining German mobility startup Via.

A year after their founding, Pallua and Merle are now ready to launch their company in partnership with Gravis, an Apple-authorized reseller who, in addition to its online store, also has 40 brick-and-mortar outlets in Germany. Gravis was an important partner when Topi replicated its product during the pilot phase.

“We are pleased that our enterprise customers can now easily subscribe to their IT equipment in real time at the time of transaction, without tedious processes and bureaucratic paperwork,” said Gravis CEO Jan Sperlich in a statement. “In our pilot phase, about half of our customers who rented hardware through Topi came back for additional products.”

But arguably more important than all of that, Topi isn’t just focused on improving access to hardware or helping companies’ cash flows – they see sustainability as a key underlying selling point behind the product.

“In light of climate change, sustainable business is becoming increasingly important for companies,” says Pallua. “Used appliances should be given a second life or recycled properly – a drawer full of old appliances should no longer exist.”

Topi’s funding round included $15 million in equity and $30 million in debt, with lenders including Index Ventures, Creandum, TriplePoint Capital and unnamed investors.

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