Pipe Technologies – Why We Invested
Pipe is revolutionizing the way SaaS companies fund their growth by creating a new asset class out of companies’ own customer subscriptions. Through Pipe’s innovative subscription financing platform, SaaS businesses can immediately turn monthly and quarterly paid subscriptions into ARR cash flow that can be used to drive innovation and accelerate growth without any equity dilution or debt.
As technology companies have migrated from up-front license revenue models to recurring revenue SaaS models one challenge has consistently hindered the best and fastest growing SaaS companies: the conflict between funding growth through up-front customer acquisition cost (CAC) and the delay in cash collection from subscriptions over the lifetime of the customer subscriptions (LTV).
For early stage companies the liquidity challenge is especially damaging. The larger the market opportunity, the more up-front equity funding is required to drive innovation and sustain growth. For too many SaaS companies this escalating need for capital has resulted in a Devil’s choice between underfunding, less product innovation, and slower growth on the one hand or excessive dilution as founders and early investors are forced to give away larger and larger amounts of equity in order to have even a chance of longer-term success.
At Fin VC we spend a lot of time thinking about these problems, exploring SaaS business models, evaluating performance metrics, and thinking about creative ways to help businesses drive performance. As a result, for some time we have been actively looking for a company that addresses this issue and delivers a technology that efficiently matches providers of capital with the liquidity needs of growing SaaS companies.
With the launch of its SaaS subscription financing platform, Pipe delivers an intuitive and seamless product experience that solves the funding problem. We believe the company’s subscription financing platform will radically transform the global SaaS business model and represents the creation of an entirely new asset class based on underlying SaaS subscriptions.
For SaaS companies, Pipe provides instant liquidity that can be used to accelerate growth and innovation without dilution or debt. For Capital Providers, Pipe enables investment access to high-quality consumer and enterprise subscription contracts valued at hundreds of billions of dollars annually and which represent one of the most attractive and fastest growing asset classes in the world.
Today we are excited to share that Pipe Technologies has raised $60M in funding led by Fin VC with participation from Tribe Capital, Uncorrelated Ventures, Lachy Groom, Anthemis, and existing investors Craft Ventures, Fika Ventures, and MaC Ventures.
We look forward to rolling up our sleeves and working closely with the Pipe management team to help them expand their business globally over the coming years.