Published on 24th October, 2023
Sustainable Growth - How Pack'd Leveraged CardPay for Success
Pack'd, founded by Alex Stewart in 2015, specialises in plant-based, minimally processed frozen foods. Their core offering - healthy smoothies - caters to consumers looking for nutritious yet convenient meals without extensive preparation. The Pack’d line began with three smoothie products, then later expanded to include frozen fruits and vegetables as well as healthy meal options, emphasising quick, easy, and sustainable solutions.
Pack'd faced a significant obstacle in securing capital due to the ever-changing landscape of the food industry. The dynamics of working with retailers means there is often a variable timeline when waiting on invoices to be paid, leading to cash flow issues for Pack’d. To manage this challenge, Pack'd used an invoice finance facility with their bank. However, this method wasn't without its issues; they found themselves only receiving approximately 35% of the invoice amount at the time, thus stagnating their cash flow. Pack'd needed a solution that would help them smooth out unforeseen cash flow hiccups, allowing them to keep operations running smoothly.
In their quest for funding, Pack'd explored credit options and qualified for an American Express line of credit. This credit card was useful for making purchases for the business, but it did not solve the problem of invoice payments to their inventory, logistics, and warehousing suppliers.
The Solution: Lenkie’s CardPay
Lenkie’s CardPay allows companies with existing credit cards to leverage that credit and pay any of their suppliers. Customers add their existing credit cards, then pay their suppliers through the Lenkie Dashboard. The credit card is charged by Lenkie, and Lenkie makes a bank transfer to the supplier, in the customer’s name. This product helps business owners utilise all of their credit options to growth their businesses.
Pack'd automatically qualified for CardPay when signing up for financing through Karma Kitchen, a cloud kitchen solution and one of Lenkie’s partner platforms. Alex was offered immediate access to the CardPay product upon completing a 2 minute Lenkie application. He quickly saw the benefit of pairing his American Express credit card (45-day credit term), with CardPay, a product that facilitates credit card payments to any of his suppliers - most of whom did not accept regular credit card payments. Like many other business owners, Alex had access to credit, but many of his suppliers only accepted bank transfers. Rather than going through the long process of attempting to secure traditional capital, Alex’s existing credit could be used to manage his cash flow.
Pairing his Amex with Lenkie’s Cardpay proved to be a highly effective financial strategy for their cash operations. Alex was able to manage his supplier payments, leading to the successful negotiation of better credit terms. As told by Alex, Cardpay helped Pack’d “smooth out the unforeseen bumps in our cash flow.”
Barriers to Growth and Future Vision
Looking ahead, Pack'd aims to raise funding to address their growth challenges and execute an ambitious plan to scale. This strategy includes expanding their retail business, entering the European market, and diversifying their product line, with a focus on their range of healthy smoothies.
Pack'd’s journey highlights how financial solutions like CardPay can reshape a business's trajectory. By overcoming cash flow hurdles and supporting growth, Pack'd is well on its way to becoming a prominent player in the health-conscious food market. As they continue expanding their offerings and entering new markets, CardPay remains an essential part of their financial strategy.