Subscription Financing Platform Pipe Technologies Raises $60 Million

By Dan Anderson ● June 29, 2020
  • Pipe Technologies announced it raised $60 million in equity and asset financing as an extension to its seed round

Pipe Technologies announced it raised $60 million in equity and asset financing as an extension to its seed round to support the growth of its pioneering SaaS financing platform. The seed extension round was led by Fin VC with participation from new investors Tribe Capital, Uncorrelated Ventures, Lachy Groom, Anthemis, and existing investors Craft Ventures, Fika Ventures, and MaC Ventures. The new round of funding will finance Pipe’s rapid growth, expand operations into new markets, and represents a significant commitment of capital to the buy-side of its platform from KSD Capital.

What does Pipe do? Pipe’s subscription financing platform is known for transforming the fundamental economics of the global SaaS industry by enabling SaaS companies to obtain instant liquidity on their subscription contracts as an alternative to costly and dilutive equity financing. Along with the $60 million in financing, Pipe also announced the appointment of Michal Cieplinski as Chief Operating Officer and Chief Legal Officer.

Ever since the company launched its SaaS financing platform in February 2020, Pipe has seen overwhelming demand from early and growth-stage SaaS companies. And the desire to fund growth based on the value of monthly and quarterly recurring revenue assets, rather than raising ever greater amounts of dilutive equity capital or venture debt, has never been stronger. Plus larger SaaS companies also utilize Pipe to offer more flexible monthly or quarterly payment terms to customers that were previously forced to be annual pre-paid, an attractive and increasingly necessary alternative as businesses nationwide face economic instability.

Recently, Pipe also officially unveiled its subscription financing platform, which is one of the most cost-efficient way for SaaS companies to access capital. And by treating subscriptions as a new asset class, Pipe creates an opportunity for cloud and SaaS software companies to convert their monthly or quarterly subscriptions to their full annual value in cash up-front.

On the other side of the platform, Pipe’s investor partners (a vetted group of financial institutions and banks) get access to alternative investments in the form of highly predictable, recurring revenue-generating assets, much like fixed-income products. And Pipe’s platform creates a market between the two sides and handles all of the servicing, giving SaaS companies instant access to capital at the most competitive market-clearing price. Plus Pipe integrates deeply with the SaaS companies’ own ERP and subscription management software, allowing them to finance their subscription assets seamlessly and instantly.

In the past, this type of financing has only been available through securitization markets for traditional assets such as mortgages. With the launch of this platform, Pipe brings this innovation to the cloud services market for the first time.

Pipe also announced the appointment of Michal Cieplinski as the company’s Chief Operating Officer and Chief Legal Officer. Michal brings years of experience in financial services technology and operations to his role at Pipe, having served as General Counsel at LendingClub.

Key Quotes:

“We’re fundamentally changing the way SaaS companies fund their growth by treating their subscriptions as a new asset class. Through our financing platform, SaaS companies can turn their monthly and quarterly paid subscriptions into the up-front cash flow they need to grow. We’ve invested in building the technology to make the process seamless and instant so that SaaS companies can focus on pitching customers, not investors.”

– Pipe Technologies co-founder and co-CEO Harry Hurst

“We believe Pipe’s subscription finance platform will radically transform the global SaaS business model, providing liquidity that will generate a tidal wave of growth and innovation for SaaS companies and positioning subscription contracts as a new and highly valued asset class for global investors.”

– Peter Ackerson, Investment Partner at Fin VC.

“Pipe has cracked the code for SaaS companies to scale – providing growth capital without dilution or debt. It’s a privilege for us to partner with such a talented team.”

– Will Davis, President & Managing Director of KSD Capital.

“Michal is a passionate leader and strategic operator who shares the same drive and principles as the Pipe founding team. He brings unique, valuable experience to our leadership team, and we’re excited to have him on board as we build and scale Pipe.”

– Pipe co-founder and co-CEO Josh Mangel,

“Pipe has the opportunity to re-shape the entire cloud services industry with a completely new approach to how companies are funded and grow. Pipe already offers a unique value proposition to the booming SaaS industry, but the vision is much bigger than the work Pipe is doing today. We’ve started with reimagining funding, but ultimately want to be a larger one-stop solution for SaaS services.”

– Michal Cieplinski