Published on 16th August, 2023
Elevating Radiance: Ava Estell's financing journey to illuminate melanated skin
Ava Estell, founded by Yaw Okyere, was launched in October 2020 with a unique focus on providing skincare products predominantly for people of colour. The idea was born when Yaw witnessed his friends and family searching for alternatives to chemical-based products that could potentially harm or bleach the skin. Leveraging his background in chemical engineering, Yaw began creating products rooted in science-backed active ingredients. By strategically marketing to a core audience, people of colour with skincare needs, Ava Estell experienced fast-tracked growth, becoming a prominent player within the niche sector.
While Ava Estell's unique positioning helped it thrive, managing growing inventory became increasingly challenging. With the logistical hurdle of maintaining six months of inventory in the US and an additional two months in the UK warehouse, Ava Estell needed to ensure sufficient cash flow to sustain operations effectively. As the company's growth accelerated, this complexity intensified, resulting in a cash flow nightmare.
To try to solve the cash flow problem, Ava Estell began looking into funding options, but they faced significant challenges. Due to the company's young age with less than 2 years of trading history, traditional bank loans were largely inaccessible. The company tried revenue-based financing, but struggled to retain cash in the business due to the high revenue repayment rates.
Lenkie’s Revolving Credit Facility
The flexible, revolving nature of Lenkie's credit facility immediately appealed to Ava Estell. Being able to draw down funds when needed and repay them with ease provided the flexibility and support the company needed to manage its inventory and cash flow effectively. Unlike other financing options, Lenkie allowed Ava Estell to access funds repeatedly after repayment, fostering sustainable growth.
The funds from Lenkie played a pivotal role in alleviating cash flow pains. Ava Estell could maintain their inventory and grow their business without taking the time to raise other sources of funding, like
equity. Lenkie funds were initially used to pay invoices related to inventory, but with the improved cash flow, the company could also utilise Lenkie to invest in marketing initiatives, aiming to acquire new customers more efficiently.
Looking Ahead: Overseas Growth
Ava Estell is now growing its revenue and expanding its business overseas. The company has already launched in Canada and plans to expand further, aiming to unlock new opportunities in Europe. In the future, Ava Estell foresees using Lenkie funds to balance out equity fundraising efforts, ensuring continued growth without undue dilution.
Lenkie's tailored embedded funding solutions have enabled Ava Estell to unlock its true potential by providing access to the necessary funds to manage inventory, invest in marketing, and foster sustainable growth. By overcoming cash flow challenges and navigating around traditional financing barriers, Ava Estell can now focus on solidifying its market position, expanding its product offerings, and seizing new geographical markets. The company is well-positioned to achieve its future growth plans and thrive in the competitive skincare industry.