Jan Laštůvka wanted to bring something really fresh into the business (according to the motto “When life gives you lemons, use Lemonero.”). That’s why he named his start-up Lemonero. He succeeded. After less than two years on the market, the company, which finances small and medium-sized e-shops in a groundbreaking way, is well on its way to further growth and expansion. It has already invested almost 40 million czech crowns in loans for more than a hundred customers.
Komerční banka recently acquired 11% share in the company for around tens of millions of Czech crowns, according to estimates. “We lend money even without generally annoying paperwork, even to e-shops established only a few months ago. We are able to send them money within one day,” Jan Laštůvka, co-owner and founder of the company, describes business model of Lemonero. “We can say that we actually operate in the market as a digital bank.”
Lemonero knows a lot about e-shops
The key to Lemonero’s business is a detailed mastery of the data flow within online stores. Lemonero analyses e-shops to the last component. With the permission of the client, the loan applicant, Lemonero connects to the e-shop and its tailor-made software verifies everything, from the stock level through the effectiveness of advertising campaigns to the business potential of the offered product. “Compared to all other lenders, Lemonero has a huge advantage in the data it can obtain. It knows exactly how much it can lend to applicants,” said Adam Šoukal, co-owner of Roger, which finances corporate receivables.
Wading in the snow
Solotron, company owned by former head of ČEZ’s mergers and acquisitions department, Vladimír Schmalz, has already joined Lemonero in the role of the so-called angel investor. Komerční banka acquired the stake through its subsidiary focusing on innovation KB SmartSolutions. “With the acquisition of Lemonero, we want to go beyond ordinary banking services,” said David Formánek, a member of the Board of Directors of Komerční banka.
Even according to Adam Šoukal, the solution that Lemonero came up with is very innovative. “It’s still very new and they’re wading in deep snow for now, but their time will come. It’s not about whether e-shops will be financed in this way, but when it will become the standard way of financing. Banks will pour a lot of money into such projects.” According to our sources, the parent company and owner of Komerční banka, the French Société Générale, is also strongly interested in the Czech start-up. It is one of the twenty largest banks in the world. “The plans are large, so far I can only say that we want to expand in Europe. The expansion with the support of the bank will then start next year,” said Jan Laštůvka.
Similar ways of digital financing of online stores already work mainly in the United States or the United Kingdom.
From Ostrava to Texas
Lemonero, which plans to lend 150 million Czech crowns this year, did not grow on a green field. Both founders, Jan Laštůvka and Luboš Malík, previously built the company Monkeydata, which processes data for e-shops. In its seven years of existence, it has gained more than 35,000 customers from online stores worldwide and has an office in Austin, Texas. It was the work with the amount of data within Monkeydata that led Jan Laštůvka to the idea that he was able to predict how the e-shops would develop in the future. From this it was a step towards starting to provide loans to prospective online stores.
“We have got to know e-commerce very well over the years, we know what to look at and how to get the borrowed money back as soon as possible and in the largest possible volume,” says Jan Laštůvka. According to its founder, Lemonero mainly benefits from the fact that banks do not have enough data to provide loans for many new projects. “They can’t just look at newly established e-shops so they can not give them money.”
The Covid pandemic caused a robust strengthening of Czech e-commerce and a large increase in the number of new projects. According to the local largest operator of e-shop platforms, Shoptet, the turnover of domestic e-shops increased by 40 percent last year, and about eight thousand new online stores were created. Many of them have too short history for a positive loan at a large financial institution. “E-shop owners need to act quickly, the processes at banks are too lengthy for them,” says Jan Laštůvka.
Credit verification within five minutes
Lemonero is able to verify the loan within five minutes after connecting the e-shop thanks to its own diagnostics, the entire financing can then be handled within 30 minutes, directly from the computer. The system verifies about 1,500 key data for the examined online store, goes through the stock level, turnover or profitability of products and attaches data on how the relevant category of goods is doing in the market in general.
“For example, the e-bike segment has quite a growth potential, so there is a certain coefficient that says that a particular e-shop is currently in the right market,” explains Jan Laštůvka. The Lemonero scoring model, which evaluates e-shop performance, runs on the basis of artificial intelligence and machine learning.
“We don’t need financial statements, we look at real e-shop data. We make a prediction of how the e-shop can develop and grow in the future. Based on that, we set up and approve the loan,” adds Laštůvka.
The fees of Lemonero’s financing is generally more expensive than financing from banks. “Entrepreneurs do not provide us with guarantees with bill of exchange or anz property, so we simply bear a greater risk than the bank,” says Laštůvka. The terms of the loans are individual, the lower the risk, the lower the loan rates.
Online financial director of the e-shop
In addition to lending money, Malík and Laštůvka also want to build Lemonero into a platform from that could significantly streamline and facilitate the financial management of small and medium-sized e-shops, i.e. other type of companies. “We want to be in the role of a financial director for the e-shop, who could advise them on how to handle money for its most efficient use,” says Laštůvka, according to whom i tis a general rule that no one in an e-shop really enjoys financial management. An online store can then focus more on the business itself. “E-commerce is not only heavily underfunded, but also has incredible potential,” concludes Jan Laštůvka.
Box: E-commerce scene in the Czech Republic in 2020
Revenues: 217 billion CZK (year-on-year growth bz 40%)
Number of e-shops: 50 000 (8 000 newly opened in 2020)
March – December 2020:
Turnover growth of small and medium e-shops: 20%
Online payments growth: 19%
Note: Small e-shop (annual turnover up to 50 million CZK), medium e-shop (annual turnover up to 200 million CZK).Source: Shoptet, Lemonero
Source: Komercni banka press release