Capchase reels in $280m for its alternative financing platform and newly launched BNPL solution

Non-dilutive capital provider for recurring revenue businesses, Capchase raised an additional $280m in new debt and equity funding led by i80 Group, less than seven weeks after a $125m round.

Other investors in the round were not announced, but previous investors include QED Investors, Bling Capital, SciFi VC and Caffeinated Capital. Capchase has now raised nearly $470m in a mix of debt and equity.

The funding will help to drive Capchase’s financing of European recurring revenue businesses. Currently, live in the UK and Spain, the company expects to launch broadly across European countries in the next 6 months.

In addition, the company has introduced a new buy now, pay later feature, which will allow companies to get money upfront for their largest expenses — such as payroll — and repay at a fixed rate in three-, six-, nine- or 12-month increments.

The company provides recurring-revenue companies with an alternative to equity financing. To do this Capchase employs a range of programmatic funding solutions that provide startups capital based on their future revenue. Its latest release, ‘Capchase Expense Financing’ enables companies to manage their largest expenses – such as legal bills, cloud hosting services, payroll and bonus payments, and recruitment fees –  without depleting their cash.

The loan is based on a company’s annual recurring revenue minus what is typically a 5% to 10% discount. An example would be a company with $10,000 in monthly recurring revenue; Capchase may pay out $108,000 for the total $120,000 ARR in return.

Capchase CEO Miguel Fernandez said the market demand was enough for the company to decide to raise more equity and debt. “Both traction and adoption are much faster than we had anticipated, and we also see larger companies tapping into this source of funding as the main complement for growth,” he said. “In this case, this round is partly nondilutive, increasing the amount of funds that can be drawn by customers and at more attractive rates.”

Capchase has helped finance more than 500 companies and is about to break the $600m mark in capital made available to customers.

Fernandez added, “Managing large expenses and having to make difficult decisions over how they spend their cash is one of the most consistent and trying issues that our clients face. Now, Capchase users can pay upfront, get a discount, and split their expense payments over fixed monthly increments.”

Capchase is not the only company in the emerging alternative finance space to see significant money roll in this year. Earlier this month, Toronto-based Clearco — formerly Clearbanc — raised $215m growth equity round led by SoftBank Vision Fund 2. In April, the company raised $100m in equity and $250m in debt that valued it at almost $2bn.

In late March, Los Angeles-based Pipe raised a $250m round at a $2bn valuation, and the month before Austin-based Founderpath raised $10m in debt.

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