Re:cap, a non-dilutive funding platform in a similar vein to Pipe.com and Capchase but based in Europe, has closed a Seed financing round of $111.5 million, in a mix of growth capital and liquidity for the revenue-based financing platform. re:cap’s first product is now officially going live, following a pre-seed funding in May of this year.
The growth capital has come from pan-European VCs Felix Capital and Project A Ventures, with participation from existing investor Entrée Capital. The new capital will be invested into further expansion of the team as well as product and entering new European markets from its launch base of Germany. Initially focused on SaaS businesses, it has plans to move into other verticals.
The company was founded by Paul Becker (CEO) and Jonas Tebbe (CPO), who previously built the LIQID fintech startup.
re:cap allows recurring revenue businesses to fund their growth, but without needing to dilute ownership via VC or taking on debt, with the ability to convert up to 50% of their ARR into instant, non-dilutive upfront cash. At the same time, institutional investors can invest directly in the recurring revenues of software companies.
Paul Becker, Co-founder and CEO of re:cap said: “Our funding platform will revolutionize the way software companies finance themselves today. But focusing on software companies is just the beginning: all financing solutions can be rebuilt with the information available in the digital age. Our ambition is for re:cap to become the European champion in this category.”
Joseph Pizzolato of Felix Capital said: “re:cap’s speed of execution in their first months has been tremendous. Both their financing solution and their technology with fully automated underwriting and transaction processing are setting standards. Based on their experience and expertise, the team around Paul and Jonas brings all the prerequisites to build a European category leader.”
“Today’s newly emerging tech players need money fast to finance and scale their business. re:cap has developed a great new digital funding platform for software companies to finance their business with the right investors quickly. We were the first major investor in Paul’s and Jonas’ previous company, LIQID, and have great confidence in the team to build something game-changing”, said Uwe Horstmann, General Partner at Project A.
Speaking to me over a call Becker added: “We operate in a similar fashion to Pipe, less so Capchase. The main difference is that we are live in Germany and we did it at a record pace. So speed for execution is important. We were able to get a lot of liquidity on the market at launch, $100M, so way more than other players when they launched. We basically have a mature product at launch, with deeper underwriting and automation, that works for institutional investors.”
“We mainly target on SAAS and software or companies with a tech component, but we’re also servicing consumer subscription companies. We mainly go after companies with recurring revenue models, enabling us to underwrite the companies. In Germany it is a little tougher to think about regulation and privacy, so if you don’t have that then you are screwed,” he added.