Unkapt is a recently launched fintech company that focuses on raising nonequity nondiluting capital for existing businesses seeking growth capital. Unlike traditional capital raising where companies give up equity in return for funds, Unkapt provides the opportunity for companies to raise capital that does not dilute the existing shareholders equity position.
Founded by two experienced investment professionals, Yanese Chellapen and Nick Ieronimo, Unkapt provides a platform (www.unkapt.capital) bringing together qualified and sophisticated investors, and existing companies seeking capital. Its transactions are all online, uses sophisticated algorithms and methodologies to screen companies seeking funds and adopts machine learning capabilities to enhance the capital raising process for all parties.
“There is a gap in the market for servicing small to lower middle market issuers and we aim to capitalize on it to offer these issuers the adequate infrastructure to increase their visibility and improve their access to finance“, said CEO, Yanese Chellapen.
“We believe that Unkapt provides a platform that can be scaled up globally and one that has crossborder transactional capabilities”, added COO, Nick Ieronimo.
On the buyside, Unkapt provides alternative investment opportunities for investors and access to (alternative) private debt as an asset. Private debt as an asset has become a significant investment class in the last few years, as world interest rates have hovered around zero, or even below.
Since the global financial crisis in 2008, private debt has grown substantially as an asset class and now institutional investors globally are allocating up to 56% of their investible funds in this asset class. An international study has found that returns from private debt asset class are comparable to what can be achieved from equity.
Issuance on Unkapt can be done by using traditional financing instruments or innovative financing instruments (which can prove to be mutually beneficial for both parties). Apart from a straight debt transaction, Unkapt provides an opportunity for investors to be repaid as a percentage of revenue rather than from profit. This is a long established method of capital raising that has made a comeback in recent years.
The Unkapt revenue sharing model has been designed to be sharia compliant as well so that it provides opportunities for Islamic investors to invest in growing midsized companies.
“We are very excited to provide investors the opportunity to have access to our RENts product. We believe that this will prove very popular as an alternative investment, including for fund managers looking for sharia compliant products”, said Ieronimo.
Under a revenue sharing model, the investor is allocated a share of revenue arising from the invested company until the repayment of a set amount. The advantage of this method is that the risk for the investor is lowered. The investor will receive progressive payments on their total investment, rather than waiting for some time in the future to recoup their investment. If things go bad, under the revenue sharing model they will have received at least some portion of their initial investment back during the preceding years.
“With our technological platform and our proactive interest in exploring innovative financing instruments, we see Unkapt upcoming role as a material catalyst participant in S.E Asian capital markets“, concluded Chellapen.