Learn how Caraway, the leading DTC kitchenware brand, leverages their Parker card to flexibly finance marketing and minimize dependence on venture capital.

• 190% growth in quarterly Amazon revenue

• 70% increase in YoY customer purchases

• 3x boost in monthly advertising spend

“Parker isn’t just a credit card. It’s effectively a financing vehicle. Their team has been awesome at understanding Caraway and creating a credit product that works for us and mirrors the seasonality of our business.” - Jordan Nathan, Founder & CEO of Caraway

About

An iconic player in DTC eCom, Caraway’s non-stick, non-toxic ceramic kitchenware has been raising the standard for home cooking and baking since 2019. Their team has long utilized payment terms (namely, credit lines) to extend runway. In the words of Jordan Nathan, Founder & CEO of Caraway, “With great terms, you are essentially able to grow without limit.”

Challenge

Caraway typically makes a majority of their sales during Q4. As they neared the holiday season of 2022, they needed a generous amount of financing to meet their projected ad spend. So, the team began scouring for both legacy credit and newer B2B options.

Unfortunately, many card companies assign fluctuating limits based on how much cash you have in the bank or the macro conditions of the economy.

This setup can be tough on your cash flow if, like Caraway, you’re an inventory-heavy brand that’s often pushing upfront deposits and payments to manufacturers. Even a situation as out of your control as an invoice hitting your account early could upset your terms.

“If you’re a consumer brand that’s scaling quickly, the challenge is when all of your cash gets tied up in your inventory. Then, you may have nothing left to hire your team or pay for advertising.”

Solution

The Caraway team had already worked with a handful of diverse credit partners. Yet, when they discovered Parker as a solution, we quickly stood out for two reasons:

1. A tailored user experience — Parker understands eCom brands do not benefit from limits that fluctuate with day-to-day changes in cash levels. Instead, we base limits on performance and future growth. “You can really invest with your Parker card and take the revenue you generate to pay them back,” explains Jordan.

2. "True net-60 terms" — In Jordan’s experience, few companies actually deliver on net-60 credit cards. With Parker, Caraway can essentially make daily payments (not a lump sum each month), which benefits cash flow and opens them up to growth opportunities.

“A lot of Parker’s strength and value is in their user experience. They have done an excellent job of understanding their customers and the financial cycle of eCom brands. You see it in the way they underwrite.”

Strategy

Parker shaped our credit products to work for the Caraway team — not the other way around.

Parker underwrites to the seasonality of your business

Previously, Caraway would approach larger banks for financing and be met with a static experience (i.e., capped limits and requiring personal guarantees). Today, Jordan reports that Parker is highly flexible in understanding and meeting the credit needs of his company.

Caraway’s spending fluctuates from month to month, especially when Q4 approaches, and their requirements for limits vary notably throughout the year. So, Parker underwrites with consumer seasonality in mind, flexing Caraway’s limits up or down during holidays, off-seasons, etc. We also evaluate their projected growth and set limits to support it.

Healthier cash flow means less reliance on external capital

The Caraway team mainly relies on healthy credit terms and cash flow to fuel their growth. In other words: “Cash flow has really funded us,” says Jordan.

As a result, they scaled the company off two rounds of funding in less than five years. The brand is less reliant on venture capital or other external investors — and leveraging Parker has only further enabled that financial ethos.

This is especially valuable given the fact that, as the market takes a downturn, VCs are investing far more conservatively.

“Parker has been really amazing to work with and positive for our cash flow. In my opinion, cash flow is the most important pillar that companies can build into their culture or DNA – it’s a great way to extend your runway through the current market environment.”

Results

Since onboarding with Parker, our credit products have become “a core tool” in Caraway’s financial stack. The most crucial use case so far has been marketing, as virtually all of Caraway’s ad spend is charged to their Parker card.

For instance, they saw their largest Q4 to date (by “pretty significant” margins) after switching to Parker. “If we’d had to pay for marketing right away, we would not have hit those same numbers,” Jordan tells us, “because the cash would’ve been tied up.”

Some other impressive gains include:

• 190% growth in quarterly Amazon revenue

• 70% increase in YoY customer purchases

• 3x boost in monthly advertising spend

Looking forward, Jordan emphasizes how Parker enables Caraway to execute aggressively on the growth marketing front. As the brand doubles down on product diversification and distribution, their Parker card will prove to be all the more valuable.

“We’ve loved using Parker’s financing products. I consider it a core tool that effectively enables you to have an unlimited budget.”