Constrafor, which provides embedded financing and payment software for contractors and subcontractors, has reportedly raised $7.5m through a SAFE note.
The fresh funds will be used for payroll and to fund operations.
The capital injection was led by Motive Partners, according to a report from TechCrunch. Fifth Wall also joined the round, making its first investment into Constrafor.
Existing Constrafor backers FinTech Collective, Clocktower Technology Ventures, Commerce Ventures, FJ Labs and NotreVis, also joined the round.
A SAFE note allows an investor to buy a specific number of shares for an agreed-upon price at some point in the future.
As to why the firm went for a SAFE note, Constrafor CEO Anwar Ghauche said he felt the market was not currently great in terms of pricing. “We’ve seen that deterioration in the multiples for fintech companies. We found that this is a much better way for us to keep growing, hence our milestones on the revenue side for the Series A, so we’re targeting to cross $5 million ARR before we actually go for a Series A. If we can be at $10 million ARR, that will be better.”
This investment also includes an option for a credit facility from Apollo.
In June 2022, Constrafor raised $106.3m in a mix of equity and debt. Since then, the FinTech company has increased its customer base from 15,000 to 23,000. It also stated that despite a “hiccup on revenue”, it has tweaked its credit origination and is now growing at 25% month over month.
Constrafor aims to improve productivity and cost-efficiency by automating back-office tasks and financial transactions through its SaaS tools and financial services. Its features include contract management, COI management, invoice management, diversity procurement, payment processing, AR processing and prequalification.
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