The relief and joy a founder experiences upon securing an investment is immense. Fresh capital is vital for startups, but it all hinges on the final approval of financial experts, without which a VC might back out. It’s this kind of happiness that our very own Roland recently played a part in, with the final approval of a €3 million funding for Ebitwise client, The Next Closet.
The Next Closet secured €3 million in growth capital from venture capitalists 4impact, the Borski Fund, and other existing investors, including PDENH. For Roland Geurts, serving as a controller at the Dutch startup on behalf of Ebitwise, this round feels like a double victory. Until last year, he was the financial director at the global NGO AIESEC, and working for The Next Closet offers a similar sense of fulfillment. After all, with its online marketplace for second-hand designer clothing, The Next Closet contributes to creating a less polluting fashion industry.
“It’s fantastic to contribute to this,” he says. “The close contact with the management during such an investment round is also enriching for me. As a controller, you’re right in the thick of things.”
Controlling Across the Board
Besides The Next Closet, Roland also manages and directs the financial affairs of three other Ebitwise clients. His responsibilities, of course, include overseeing financial administration and processing invoices and recurring monthly costs. Ebitwise controllers also assist in optimizing sales and marketing ROI, minimizing costs, conducting contract negotiations with potential partners, and drafting financial plans with cash flow scenario analyses.
“The monthly reports that result from this are something founders always look forward to,” Roland says. “And these are the kinds of moments that bring satisfaction.”
Looking Beyond Revenue and Profit
The investment journey of The Next Closet is, of course, a project that truly captures the imagination, for both him, the Ebitwise team, and the public. While an investment round makes for a fun anecdote at birthdays, at its core, it involves meticulous number crunching.
“People often overlook KPIs that are crucial for an investor. It’s not just about revenue and profit, though they are certainly key. It also involves, for example, revenue growth, cash flow, gross merchandise value, and broadly the personnel, marketing, and platform costs. Investors also look at expected profits, including less probable alternative future scenarios.”
“The monthly reports that result from this are something founders always look forward to.”
What is Gross Merchandise Value?
The term ‘gross merchandise value’ might stand out to a birthday party attendee. “Unlike net revenue, the actual revenue that The Next Closet can attribute to its bank account, gross merchandise value represents the total value of the product or products it sells,” explains Roland. “This includes not just the commission income for the platform itself, but also the revenue for the seller on the platform, the income for logistical partners, and a percentage for the payment provider. This figure ultimately gives a better picture of the value The Next Closet provides to the entire ecosystem, and the actual impact it generates.”
Impact
And that impact is significant. Pauline Wink from investor 4impact recently stated in a celebratory press release that “The Next Closet is a pioneer in the market. With their local approach and automated platform, they are well-positioned to make a substantial contribution to the circular economy.” Bertrand van Leersum of Borski Fund added that ‘this diverse, women-led team creates a better future in an explosively growing market.’
With this capital, The Next Closet can attract more talent, strengthen its market position, and accelerate growth. The platform, founded by female entrepreneurs, recently strengthened its management team with COO Peter Koning, formerly of OLX, and CCO Suzanne Kats, former Sr. Director of Global Brand Strategy at Tommy Hilfiger.
