New York-based Capchase, a fintech company that helps SaaS companies finance the growth of their operations with cash tied up in future monthly payments, raised a US$ 125 million Series A round of funding on 4 June 2021.
Investors: The funding was a mix of equity and debt and was led by QED Investors. Other participants in the round include Bling Capital, SciFi VC, Caffeinated Capital and several angel investors. The total funds raised by Capchase stands at US$ 190 million.
Purpose of the funding: Capchase will utilize the funding amount to expand its non-dilutive funding platform and offerings to founders. It is also looking forward to expanding its operations across the U.K. and Spain.
Founded in 2020 by Ignacio Moreno, Luis Basagoiti, Miguel Fernandez and Przemek Gotfryd, Capchase’s mission is to provide a fair and equitable process, partnering with founders and entrepreneurs alike to give them the ability to scale on their own terms. It is a data-driven, non-biased platform. The startup has introduced a programmatic feature that allows companies to receive the exact amount necessary to reach their goals based on their revenue growth and future plans.
Capchase is an alternative to venture funding for founders which can be expensive and dilute ownership stakes. It offers upfront capital to companies with recurring revenue. The capital offered is based on a company’s annual recurring revenue minus a 5 percent to 10 percent discount. For example- for a company with US$ 10,000 in monthly recurring revenue, Capchase may pay out US$ 108,000 for the total US$ 120,000 ARR in return.
The startup claims to have issued more than US$ 390 million in financing to over 400 companies. It also expects to grow by 400 percent over the next six months.
“The market is crazy. Founders are flocking to this type of model. You don’t want to take out funding you are not using.” — Miguel Fernandez, co-founder and CEO.
“I have watched the fintech sector for more than a decade. The B2B fintech market is now starting to get caught up in the wave of growth. All that innovation is starting to bleed into B2B.” — Matt Burton, Partner at QED Investors.
Some of the competitors of Capchase who are offering alternative methods to fund startups are – Austin-based Founderpath and Los Angeles-based Pipe who are lending funds based on a company’s monthly, quarterly or annual recurring revenue.
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