Capchase, a New York-based provider of non-dilutive capital for recurring-revenue companies, announced today that it has launched Capchase Earn, an innovative account for fast-growing companies that generates 3% return and is designed to significantly reduce the overall cost of capital.
A first-of-its-kind solution, the latest product offering will support Capchase’s mission of accelerating growth for high-potential businesses through better financial products.
Capchase Earn is designed to help startups fuel their growth and stay in control, by enabling otherwise idle cash, such as venture capital funding, to grow at an extremely competitive return of 3.00%. For US-based customers, every dollar is protected with FDIC and DIF insurance, even above the standard $250K amount covered by FDIC.
When funds are combined with other Capchase financing products, companies are able to significantly reduce their total cost of capital: Capchase Grow brings a company’s revenue forward to today, while Capchase Extend smoothes out the repayment of large expenses. For example, depositing $3M in Capchase Earn would unlock $2M of Capchase Financing at a 1.50% discount rate.
Miguel Fernandez, Co-founder and CEO of Capchase commented: “Capchase Earn is going to change the way companies grow forever. By combining this account with our other revenue financing products, a company raising a round for 18 months of runway can now go 2.5 times longer without slowing down for a negligible cost. This is a game changer for the startup community and is yet another way Capchase is working to help startups focus on building and growing first, not fundraising.”
Diego Coria, Global Finance Manager at Nowports, a customer who took part in the product beta for Capchase Earn, said “Capchase Earn was a great option for us because the return helped us make use of the capital we didn’t immediately need. When you raise funding, you have a lot of money sitting idle in your bank. You need to take action with that money, so that it starts producing.”
Capchase was launched in 2020 to help recurring revenue companies secure growth capital that doesn’t dilute their founders’ ownership. By working with Capchase, companies can unlock cash that is otherwise tied up in future subscription based payments, allowing founders to either reinvest the upfront capital in profitable growth initiatives, or secure cash on hand to extend their runway. Additionally, Capchase also offers an expense financing solution that allows large expenses to be split over time in fixed repayment terms. When combined with Capchase’s leading programmatic funding solution, companies can realize faster growth while at the same time preserving their cash.
As part of this launch, Capchase has partnered with BankProv, a future-ready commercial bank that offers adaptive and technology-first banking solutions to emerging markets, to provide the banking services. The 3% is subject to change based on borrower profile.