Startup company Pipe wants to make the process of obtaining SaaS (software as a service) startup funding less laborious, and it’s raised $50 million in a new round of funding to help them do it.
Pipe takes a SaaS startup company and pairs it with investors who give the startup business its revenue upfront. The hope is that the SaaS startup company will have more access to its future funding, allowing the business to focus more on what matters.
Jim Pallotta, founder and CEO of Raptor Group, said that the SaaS investment company could prove to be a key player in the alternative financing space.
"Having spent my career working in the capital markets, I instantly saw how impactful Pipe's platform would be as a new mechanism for helping companies to grow," he said. "Pipe represents a significant innovation in the alternative financing space and is transforming how companies access growth capital."
The Value of the SaaS and Alternate Financing Markets
The alternate finance industry is a growing one, and it’s providing new ways of supporting businesses that are more flexible than ever. The alternate financing industry is growing at a compounded annual rate of over 7%, which market research firm Statista says is “very promising.” Furthermore, the market is expected to reach a valuation of almost $10 billion by 2025.
Pipe stands to gain a lot from the SaaS business. In 2020, the market had been expected to be valued at $101.5 billion. Now, the SaaS business is growing at a compounded annual rate of 11.7%.
So it’s clear that Pipe and any SaaS startup business it supports have quite a bit to gain. And one of its investors, Shopify, says that the startup company could become crucial to reshaping the structure of business financing in the future.
"We are thrilled to participate in Pipe's most recent round and look forward to working with them as they bring this important capital source to entrepreneurs around the world,” said Brandon Chu, vice president of product at Shopify. “Pipe provides non-dilutive, founder-friendly financing, which is critical to creating more successful entrepreneurs in the future, and both Pipe and Shopify are deeply aligned toward that mission.”
So here’s what’s clear: business is changing, and the startup funding required to perform that business is coming from a variety of new places. Given all that, a company providing startup funding is placing itself at the intersection of a new way of doing things, which is exactly what Pipe is doing.