Shopify is riding the wave of the future, and by that we mean that our favorite e-commerce platform just upped the max amount of funds businesses can access to $2billion to help boost the growth of its fast-scaling merchants.
This may sound cryptic for our regular readers, if we have one, so let us elaborate: as pera recent article from the Financial Times, back in 2016 Shopify introduced a new business program, Shopify Capital respectively, that provides short-term business funding in the form of merchant cash advances and short-term loans.
Now, the company is injecting more cash into Shopify Capital, in order to help eligible merchants using its platform to boost their businesses. The machine learning thing helps Shopify determine eligible merchants in a matter of days, 5 business days respectively. That’s the power of AI baby. As in, instead having regular folks looking at one’s business and determining its cash flow and all that, in order for the respective business to become eligible for a loan, now there’s an algorithm taking care of the entire process.
We don’t know if that’s good or bad, but it definitely sounds very high tech and sci-fi. Obviously, Shopify merchants have full control over how to invest their funds, and they maintain complete ownership of their Shopify store.
Shopify Capital is available directly through the platform, and you can secure a loan to the tune of 2 million US dollars max. More than 300 million dollars were loaned to Shopify merchants in the first quarter of 2021 alone, which is almost double the amount compared to the previous year. Also, the number of merchants who pre-qualified for Shopify Capital increased by 78 per cent YoY.
Here’s Kaz Nejatian, VP product, merchant services at Shopify explaining what’s going on:
“Today, entrepreneurs still find it challenging to get the funding they need to grow. Our goal is to remove that barrier and provide them with financial tools to help them succeed.
“By providing modern funding developed with today’s small businesses in mind – and financial products that actually cater to their needs – we’re levelling the playing field for our merchants.”
And here’s Solmaz Shahalizadeh, VP data science and engineering, commerce intelligence at Shopify on the machine learning thing:
“Machine learning is the reason we’re able to get our merchants the funding they need, at the speed required to boost their business growth, at the right time.
“The machine learning principles behind Shopify Capital enabled us to pioneer bringing AI into production in a way that hadn’t been seen in the industry before. Today, we’ve built upon those principles and scaled them across Shopify’s portfolio of AI products.”
According to Shopify, the AI powered machine learning gizmo can predict merchants’ minimum sales with 90 per cent accuracy.