Daily News: July 23, 2014

CapX Partners Closes Karmaloop Facility

CapX Partners announced the closing of a $13 million senior loan facility to support the growth needs of Karmaloop.

Over the past few years, Karmaloop validated its marketplace position and brand presence by growing top-line revenue, reaching mass scale and exploring brand extension initiatives in media as well as niche acquisitions. Karmaloop’s goals for fiscal year 2014 are to enhance operating initiatives and maintain its leading market position.

“CapX favors industry leaders and looks for opportunities to fuel a company’s growth objective. Karmaloop has many compelling business characteristics whereby CapX believes they will achieve its long term constituency goals,” said Jeffry S. Pfeffer, CapX managing partner.
“As a mature and expanding business, Karmaloop already had a well-defined capital structure at the time of CapX’s introduction. CapX consistently looks for growth opportunities that exhibit underwriting balance amongst cash flow, collateral, and business enterprise value. CapX appreciated Karmaloop’s improving operating metrics and had interest as a senior lender. Karmaloop’s Corporate Counsel, Burns & Levinson, strategically introduced CapX to Karmlaoop management and its existing senior lender, Comvest Partners, to see if all parties could reach the common goal of more growth capital. The result was Comvest inviting CapX to equally share the total senior loan facility including a material increase to working capital. In addition, CapX was able to expedite its due diligence and close within the highly desired 30-day time frame.

“Karmaloop CEO Greg Selkoe and his team, along with the support of lead investor Insight Venture Partners, have built a dominant brand in the 18-35 year-old verge market,” added Stephen J. Healey, managing director of CapX Partners in Boston. “We worked with management and incumbent lender, Comvest Partners, to tailor a financing package to meet the needs of this growing company.”

“We are thrilled to have CapX as part of the investment team backing Karmaloop and are honored to have their support and confidence” stated Greg Selkoe, CEO of Karmaloop. “Steve and Jeff have already proven to be valuable partners above and beyond just capital.”

Boston-headquartered Karmaloop is a cultural hub for multicultural 18 to 35 year olds, trendsetters and brand loyalists.