New York-based Capchase—which is no stranger to large debt raises—closed its largest debt round to date, locking up $400 million to provide funding to startups.
The new round comes just about four months after the nondilutive capital provider raised an $80 million Series B, and almost a year after it closed a $280 million round of debt and equity led by specialty finance firm i80 Group.
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The newly announced financing also is from i80 Group and what the company called “an international banking group” in a release. Capchase now raised nearly $950 million in a mix of debt and equity, according to Crunchbase data.
Capchase now has more than $1 billion to deploy to SaaS startups, it said in a release.
What Capchase brings to the table
The company offers a variety of tools on its platforms that give founders nondilutive financing tools to fund their startups. Its main product—Capchase Grow—enables recurring-revenue companies to access future capital upfront. The loan is based on a company’s annual recurring revenue minus what is typically a 5% to 10% discount.
Earlier this year, Capchase’s co-founder and CEO Miguel Fernandez, told Crunchbase the company was seeing significant new traction due to market uncertainty. It now reports seeing a 50% increase in demand from April to May of this year.
In March, Fernandez said Capchase had worked with nearly 3,000 companies in the U.S. and Europe—making over $2 billion in funding available—since launching in 2020, and watched its ARR increase 2,300% last year.
It has been well documented that the venture market is not what it was last year, as valuations have been slashed and funding is down.
Such a market may force startups to look more closely at alternative financing tools such as venture debt, shared earning agreements and revenue-based financing.
In past years, such tools proliferated in popularity as founders tried to avoid dilution and loss of control of their companies in a hot market with investors waving cash at them.
Now those tools could become a necessary part of survival where money is much tougher to come by.
- Exclusive: Capchase Raises $80M Series B To Give Startups Alternatives To Venture
- Got Revenue? Alternative Financing Tools Look To Help SaaS Founders Avoid Dilution
- Capchase Doubles Down, Raises Fresh $280M To Provide Startups With Alternative To VC Funding
- Fintech Unicorn Pipe Looks To Build a Line To Hollywood
Illustration: Dom Guzman
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