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topi Launches Its Hardware Subscription Platform

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QUICK TAKE

  • A category-defining company, topi has built the rails – at the point of transaction and with real-time vetting – that enables merchants to simply offer hardware-as-a-service for the first time
  • It’s set to transform how businesses procure equipment; by renting instead of owning equipment businesses are able to access the latest technology and ease cash flow - reducing electronic waste and helping to create a circular economy
  • As commercial operations kick off, Index Ventures and Creandum are co-leading this funding round

INDEX PERSPECTIVE

By Julia Andre, Partner

There’s little doubt that Software-as-a-Service has fundamentally changed how businesses operate and manage costs. The model has shifted what were traditionally fixed costs to variable ones, providing ease of access and flexibility around scaling.

Until now, these advantages have not been accessible for hardware. Yes, there are ways for companies to lease equipment, but the process is long and labour intensive for both sides of the transaction. There’s been no off-the-shelf solution for businesses akin to what’s happened with consumer commerce over the past decade. Companies are too often stuck having to purchase capital-draining equipment that quickly depreciates and becomes outdated.

It’s why I’ve believed in Estelle and Charlotte’s vision to build the infrastructure for Hardware-as-a-Service since my first pre-seed conversation with the duo. At Index, we’ve long seen that tools for B2B commerce have been seriously lacking – something that often comes up in conversations with companies in our portfolio. We share topi’s vision that their subscription platform will unlock the as-a-service model for equipment at scale, creating a new access model and serving the huge pent-up demand that exists from both merchants and buyers.

Put simply, topi is a category-defining business and has the potential to transform how every business buys hardware globally.

THE DETAILS

Globally, over $3.7tr is spent on capital expenditures by companies each year. With electronics alone, businesses must acquire computers, desktop screens, smartphones, printers, and in many cases, specialised machines. Yet ownership of these assets creates a whole host of constraints, from capital management to operational complexity. As a result, businesses are increasingly shifting from ownership to access, transforming expensive investments into low monthly expenses.

By renting equipment, businesses can avoid hardware obsolescence, stop wasting time on outdated devices, improve operational flexibility, and ease cash flow. But traditionally, offering products as a hardware subscription is complicated. It presents numerous challenges for the seller, from risk and fraud management to refinancing, monthly billing and management of outdated devices. By creating an end-to-end transaction platform, topi solves all of this: it simply unlocks hardware subscription services for business merchants for the first time, expanding their market, and enhancing customer experience and loyalty along the way.

"The as-a-service models that have long been established for software will also become the standard for hardware” explain Estelle Merle & Charlotte Pallua, co-founders of topi. “Our subscription platform will ensure businesses’ liquidity is protected, while employees never have to work with outdated equipment again.”

The news comes as topi announces its strategic partnership with GRAVIS, one of the leading electronic retailers in Germany. “This is a total game changer for us. We have been looking for a partner like topi for a long time.” says Jan Sperlich, Managing Director of GRAVIS.

“We are very excited that our business customers can now easily subscribe to their IT equipment in real-time at the point of transaction, without tedious processes and bureaucratic paperwork. In our pilot phase, already around half of our customers who have rented hardware through topi, have already come back for additional products.”

With the subscription option embedded in the purchase flow, topi is building the rails for B2B merchants to offer Hardware-as-a-Service (HaaS). In the back end, topi’s fraud and risk engine vets eligible buyers automatically and in real-time. Through sophisticated integrations between trade-in partners, financial partners, insurance providers and merchants, topi enables live and automated check-out.

What’s more, topi will help ease the 50 million metric tons of electronic waste that ends up in landfills yearly. Equipment manufacturers will need to consider not only what happens when a product is sold, but how they can extend its lifecycle to promote re-use or properly recycle old devices. ​​As the world moves to a more circular economy, topi will play a key role in reducing hardware waste, by either giving used devices a second life, or properly recycling old devices.

topi is founded by Charlotte Pallua and Estelle Merle, who met at Harvard Business School and previously held leadership roles in hardware subscriptions at Apple and SaaS at Goldman Sachs. Since launching last year, topi has grown to 35 people, who have joined from companies including Revolut, PayPal, GoCardless, Checkout.com, N26, McKinsey and Meta. Half of the leadership team and 60% of the tech team is female.

As commercial operations begin, the company has raised $45m through a combination of equity and debt, of which $15m is equity led by Index Ventures and Creandum, with participation from Silicon Valley-based TriplePoint Capital. It brings the total the company has raised to near $50m, with Index Ventures having led the company’s $4.5m seed round.

In this post: Julia Andre, Topi

Published — Aug. 31, 2022