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SaaS financing platform Requr raises €5 million

Source: Requr

Requr, a new financing platform for SaaS (Software-as-a-Service) companies, has raised €5 million in growth capital from a group of experienced investors.

Requr pays SaaS companies with predictable and recurring revenue upfront the annual value of their monthly subscriptions. This allows SaaS company founders to fund their growth without dilution.

According to Tom van Wees, co-founder and CEO of Requr, the big challenge for fast-growing technology companies is that investment costs often outweigh the benefits. “As an entrepreneur, you have to invest a lot -- in key talents, in the sales and marketing engine, and also in your product -- before full turnover is realized. To have cash available sooner, some SaaS companies offer up to 30 percent discount to customers who pay their subscription fees in advance. Requr's financing model largely solves this cash flow problem, which is a critical growth barrier for SaaS companies.”

Founders Tom van Wees, Lennard Kooy and Martijn Niessen experienced this same dilemma with their SaaS companies -- Ginger and Storyteq. As experienced entrepreneurs, they saw first-hand how much impact the current way of raising growth capital has on business operations and equity ratio. Collecting growth money takes a lot of time, distracts from the core business; and with each raise, shares must be issued. With the money raised via Requr, companies can achieve growth, expand internationally, or make acquisitions -- all without the negative impact of non-strategic dilution.

New way of SaaS financing will be the standard in ten years
Requr is initially targeting SaaS companies in continental Europe that realize more than €20,000 in monthly recurring revenue. The company plans to quickly expand into Scandinavia. Tom van Wees: “You see a global trend of online and offline companies moving towards a subscription model. In time, those (non-SaaS) companies will also gain access to Requr's platform. I am therefore convinced that this method of non-dilutive growth financing will be the standard method of financing in ten years' time."

Professional investors prepay the annual subscription fee (contract value) of customers of SaaS companies via Requr. They then get this prepaid money back in monthly installments, including a predetermined return. This is beneficial for SaaS companies because their customers usually pay monthly or quarterly.

Requr has developed a proprietary algorithm that maps risk profiles of SaaS companies and contracts. The return for financiers, which varies from 2 to 10 percent, is calculated based on this risk analysis.

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