Two years after it was founded, Paperstack has raised over $9 CAD million to help it shake-up the e-commerce finance market.

Paperstack provides e-commerce businesses with working capital as well as financial insights to help them accelerate operations. Paperstack provides non-dilutive funding to help these businesses purchase inventory, invest in advertising, and finance payroll.

Access to working capital can often be difficult for small e-commerce businesses to access. Venture capital may be sparse or expensive to obtain and banks have requirements that can be difficult for small businesses to meet. Paperstack is among a number of companies that realized in recent years there was a gap that needed to be filled.

Since its launch, Paperstack has garnered the attention of Techstars and Google, having taken part in accelerator programs run by each organization. Paperstack has also secured financing from institutional venture funds, such as Techstars Ventures, Gaingels, and OCI, as well as angel investors that range from executives at major Canadian financial institutions like TD Bank and BMO, to startups like Wealthsimple, Koho, and Shopify.

Paperstack was created by CEO Assel Beglinova alongside CTO Vadim Lidich. Both immigrated to Canada in their late teens and attended post-secondary school. Beglinova started her career working for big banks before being laid off during the pandemic. During that time, she met Lidich, an entrepreneur who had launched a few startups already, including one with a successful exit. Prior to being laid off, Beglinova had started to work in small business loans and lines of credit but realized some inequity in the market. The pair combined their expertise and launched Paperstack in 2021.

“She started telling me about her idea to democratize access to capital for small businesses, and I said, ‘let’s do it,’” says Lidich.

Paperstack has supported a number of e-commerce businesses to date, helping them grow by as much as 82% year-over-year. The startup’s long-term vision is to become a global company and Beglinova sees the opportunity due to the ever-growing e-commerce market.

Paperstack has brought innovation to the industry. At the core of its platform sits proprietary underwriting technology that utilizes advances in AI and machine learning to analyze e-commerce data and project future performance with 90% accuracy. This technology is being used to reduce the cost of borrowing for Paperstack clients, while providing lenders on the Paperstack platform with the ability to mitigate risk.  

Paperstack’s model also has the potential to democratize access to capital for women and overlooked founders. According to Beglinova, 84 percent of Paperstack’s customers are either women founded or have women on the executive team, as well as teams with founders from diverse backgrounds.

The Ontario Centre of Innovation (OCI) has supported Paperstack through Ready 4 Market (R4M), Ontario’s leading pre-seed investment fund. Through the fund, OCI co-invests with angel and other investors in early-stage Ontario-based startups with competitive IP commercializing transformative technologies to support their growth into scalable businesses. The idea is that the R4M investment de-risks the opportunity, helps the startup become investor and customer ready, and attract private sector co-investment and follow-on. In Paperstack’s instance, the company attributes OCI’s support with helping to close the financing round raised earlier this year.

Paperstack is now using that financing to help fund e-commerce businesses and grow in its own right. According to Lidich, the company has surpassed $1 million in annual recurring revenue (ARR) and is continuing to grow its pipelines of customers. It has also begun partnering with financial institutions to provide more types of support to its customers.