Capchase, a startup in the US that focuses on providing access to tech companies for non-dilutive capital, has raised $125 million in a mix of debt and equity.
The platform is looking to provide financing at a low cost to companies in a way that they would not need to dilute their shareholding or look for expensive investment rounds that may not be accessible to all.
The Series A funding for the platform was led by QED Investors and it was joined by Bling Capital, Caffeinated Capital, and others. This capital is expected to be used to upgrade the platform, improve the features and also move the platform to UK and Spain as well.
The platform would help companies to unlock the capital that they are likely to get in the future in the form of assured revenue. The platform also claims that it would help the companies and their founders to access just the right amount of capital at just the right time so that the money and revenue are not wasted.
The company also says that it has specific algorithms that would study the cash flow of the company and come up with their weekly and monthly requirements so that such financing is made available to them at the right time rather than providing them with one single large payment. They believe that this kind of disbursement is more efficient for the lender and also more useful for those who receive the funding.
The company has disbursed $390 million through its platform so far with over 400 companies benefiting from the platform.
“We built Capchase to help tech companies access the capital they need to grow faster, without selling their company bit by bit,” says Miguel Fernandez, CEO. Capchase.
This is an interesting approach being taken by the platform in a field that has long since not seen innovation. Even now, financing and investment for small companies and startups are being done in the same old way that has been happening over several decades and this seems to be a refreshing method though the success of this method would highly depend on how this is executed in the long run. Each company operates differently and to arrange and customize funding for each of them on a weekly or monthly basis would be a challenge for any platform. It remains to be seen how well Capchase has managed to solve this problem.