When we launched Tradecycle in Q4 of 2016, we felt that our unique, unsecured payables finance model would prove to be an extremely valuable tool for the Private Equity community. In November of 2018, we implemented our first program for a PE-backed business. Fast-forward a few years and, through Q2 in 2022, Sponsor-backed companies accounted for 60.4% of our annual funding volume. This percentage continues to expand at an accelerated rate.
Sponsors invest in businesses to grow those businesses and, ultimately, work to sell them for much more than they originally paid. Whether the growth comes through new client acquisition, increased inventory, geographical expansion, acquisitions, or through a combination of “all of the above,” growth requires tremendous working capital.
Tradecycle’s model has been utilized by various PE firms to bolster the working capital needs of their platform businesses without disruption to the capital stack. Further, Tradecycle’s involvement has helped expedite the timing and magnitude of growth of the platform companies resulting in larger returns to the Sponsors.
Over the course of 2022, we have witnessed three very successful exits for Sponsors whereby Tradecycle played a supporting role in the operating businesses:
- Foss Floors – a specialty flooring company purchased by a strategic (Mohawk Industries, NYSE:
- Midway Dental – a dental supply company purchased by a Strategic (Henry Schein, Inc.,
- NASDAQ: HSIC)
- Distributor / Manufacturer of various brands purchased by another Sponsor
John Morgan, CFO of Midway Dental stated, “Tradecycle’s platform provided us with the liquidity that helped fuel our growth. Justin and his team were outstanding to work with and provided us with a world-class experience.”
Neel Mayenkar, Managing Director at Wynnchurch Capital (the Sponsor of Foss Floors) stated, “Tradecycle provided a unique, easy-to-use and effective solution to leverage our payables and improve our cash collection cycle.”
Tradecycle continues to expand its relationships in the Private Equity space and deepen its existing relationships through support of an increasing number of platform companies. Please contact us to learn how we can improve working capital and increase the enterprise value of your operating businesses.
Justin P. Goheen
CEO & Founder, Tradecycle Capital LLC
Founded in 2016 by Justin Goheen, Tradecycle provides unsecured Accounts Payable Finance solutions that work seamlessly with Senior Credit Facilities to supplement the working capital needs of its clients. The technology driven solution provides an additional tool to assist clients in managing their working capital through extended payment terms.