FinTech Requr has raised $5m in growth capital from a group of undisclosed investors to expand its software-as-a-service (SaaS) platform.
Requr pays SaaS companies with predictable and recurring revenue upfront the annual value of the monthly subscriptions. According to Requr, this allows SaaS company founders to fund their growth without dilution.
The company has developed an algorithm that maps risk profiles of SaaS companies and contracts. The return for financers – which can vary from 2% to 10%b – is measured based on this risk analysis.
Requr highlighted that professional investors prepay the annual subscription fee of customers of SaaS companies through Requr. They then receive this prepaid money back in monthly instalments – including a predetermined return.
The company claims it initially targeting SaaS companies based in continental Europe that bring in more than €20,000 in monthly recurring revenue, before moving into the Scandinavian market.
Requr CEO and co-founder Tom van Wees said, “You see a global trend of online and offline companies moving towards a subscription model. In time, those (non-SaaS) companies will also gain access to Requr’s platform. I am therefore convinced that this method of non-dilutive growth financing will be the standard method of financing in ten years’ time.”
Van Weest added that the big challenge for fast-growing technology firms is that investment costs often outweigh the benefits.
He said, “As an entrepreneur, you have to invest a lot — in key talents, in the sales and marketing engine, and also in your product — before full turnover is realized. To have cash available sooner, some SaaS companies offer up to 30 percent discount to customers who pay their subscription fees in advance. Requr’s financing model largely solves this cash flow problem, which is a critical growth barrier for SaaS companies.”
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