Three founders, one vision – and an impressive rise. In 2022, Fabian Baumann, Linus Pfeil, and Thomas Röser launched Cozy Heaven with a clear mission: to bring luxurious, sustainable bedding made from 100% lyocell to the market. In a short time, the company has become a sought-after brand – thanks partly to the targeted use of Silvr loans for inventory financing. Earlier this year, Fabian shared more about their financing strategy and Cozy Heaven's rapid growth.
Fabian, what is your role at Cozy Heaven?
Each co-founder has a distinct area of responsibility. Linus oversees performance marketing, while Thomas manages the operational side of the business.
I handle everything related to our product. I work closely with manufacturers, develop product improvements and innovations, and oversee financial operations. This includes ensuring smooth collaboration with our accounting firm and maintaining sufficient liquidity for the business.
What challenges have you faced as a young company?
One of our biggest early challenges was logistics. Initially, we handled shipping ourselves, which was manageable given our small financial scale. Back then, we had no large salaries or significant fixed costs. But as our revenues grew in 2023, things changed quickly. Suddenly, we had to ask ourselves: How do we scale sustainably? How do we finance our increasing marketing budget and product orders?
Inventory financing and planning were among our biggest challenges from the start. Our product – high-quality bedding made from 100% lyocell – is expensive to produce and requires significant upfront financing. Unlike cheaper consumer goods, such as cosmetics with lower unit costs, we have a completely different cash flow requirement.
We also encountered unexpected hurdles, such as counterfeits. At one point, we had to deal with Chinese replicas of our online store, where fake Cozy Heaven products were being sold at dumping prices.
Of course, bureaucracy was another challenge. Germany doesn’t make things easy for startups in the financing phase or daily operations. Banks and investors are often hesitant to trust a young company. As founders, we were reluctant to personally guarantee everything—our homes, families, and personal assets.
E-commerce is a capital-intensive business. Especially in our industry, you need to invest first before generating revenue. However, the right strategy, smart financing decisions, and a strong team can overcome even major challenges.
How did you finance your startup?
We have been wholly bootstrapped since day one—meaning we’ve grown without external investors or significant funding rounds. In 2022, we launched with a few small private investments, funding our first batch of inventory with our own money. Since then, we have exclusively grown through our own cash flow.
Of course, after launching our online store, it took some time for the business to gain traction. But by 2023, we saw strong growth and scaled by triple digits last year. We’re on the path to building something even bigger.
Financing a young business isn’t always easy. Most startups rely on a bank loan for founders, which typically runs for several years. The downside? You’re often personally liable.
You need capital, especially in the early stages, but access to financial resources is limited.
How did you discover Silvr?
We were already familiar with Myos through our work at Paul Valentine Group. We initially used Myos for Cozy Heaven as well. Their model worked by holding ownership of the purchased inventory until it was paid off.
When Myos left the market, we received an email from Silvr. We checked out their offer and were satisfied from day one.
What financing sources do you use today?
We have always relied on a long-term loan from our bank. Additionally, we use PayPal, which has both advantages and disadvantages.
The biggest advantage is that it’s fast and easy—no collateral is required, and PayPal has real-time access to cash flow, automatically adjusting repayments based on revenue.
The downside: PayPal can be unpredictable. Many businesses have experienced sudden fund holds or account suspensions.
Another factor is PayPal’s dynamic repayment structure: If sales are strong, you repay the loan quickly—but at higher short-term expenses.
In addition to PayPal, we use a credit card with cashback benefits to gain a small financial advantage on our expenses.
We still regularly speak with banks, but their financing offers are often unattractive. Most banks only provide five to six years of long-term loans, which doesn’t suit our need for short-term financial flexibility.
Recently, we’ve been relying exclusively on Silvr, as it allows us to manage our growth strategically.
What do you like most about Silvr?
One significant benefit is how simple and bureaucracy-free the loan process is. Thanks to Open Banking, we receive quick feedback on whether our loan request will be approved, making the entire process seamless and efficient.
Similar financing providers are mostly found abroad, but Silvr has the advantage of offering local support with trusted advisors who understand our business and speak our language.
We also love Silvr’s portal, where documents can be uploaded easily, and the entire process is designed to be as hassle-free as possible.
How do you use Silvr financing?
We use Silvr entirely for inventory financing.
In 2023, we were constantly out of stock; even last summer, products frequently sold out. This hindered our growth. If a best-selling product isn’t available, it takes time to restock, leading to lost customers and missed revenue.
With Silvr, we avoid stockouts, ensuring our best sellers are always available. This allows us to prepare for key sales periods, like Black Friday and Christmas, and keep marketing campaigns running profitably.
Additionally, Silvr helps us plan. For example, when special tax payments hit e-commerce businesses in February, we can use Silvr’s dashboard to track outstanding balances and align them with our cash flow plan.
Will you continue using Silvr as a financing partner?
Absolutely.
We need financial flexibility to ensure we never run out of stock, especially during our busiest sales periods. We’re already building a safety stock using Silvr for inventory financing.
Additionally, working with Silvr has been fantastic. Questions are answered quickly and efficiently, communication is smooth, and their team is easily accessible by phone.
With each refinancing cycle, our trust in Silvr grows, and we see them as a key financing partner for our continued growth.
Silvr in one word?
Reliable.
