A little over one year earlier, Pipeline raised a $6 million seed round led by Craft Ventures to help it pursue its objective of offering SaaS companies a financing option outside of equity or venture financial obligation.
The buzzy startup’s goal with the money was to provide SaaS companies a way to get their profits upfront by combining them with investors on a marketplace that pays an affordable rate for the yearly worth of those contracts. (Pipeline explains its buy-side participants as “a vetted group of financial institutions and banks.”)
A couple of months after that initial seed raise, Pipe brought in another $10 million in funding as an extension of that round.
And now today, Miami-based Pipeline is announcing a brand-new raise — —$50 million in”strategic equity financing” from a multitude of high-profile financiers. Siemens’ Next47 and Jim Pallotta’s Raptor Group co-led the round, which also included involvement from Shopify, Slack, HubSpot, Okta, Social Capital’s Chamath Palihapitiya, Marc Benioff, Michael Dell’s MSD Capital, Republic, Alexis Ohanian’s 7 Seven 6 and Joe Lonsdale.
While most of the round is dedicated to buying primary equity, a minority of the round is assigned towards buying secondary equity (meaning that a little part of the dollars raised approached buying shares from existing shareholders, such as employees and executives).
Pipe co-CEO and co-founder Harry Hurst is loath to label the most recent raise with a phase.
“We don’t want to play the alphabet game,” he stated. “This wasn’t about the money. We had five or 6 years of runway going into this round. It was about getting the right partners on our cap table.”
In combination with the brand-new financing, Pipe stated it is also widening the scope of its platform beyond strictly SaaS business to “any business with a recurring revenue stream.” This might include D2C membership companies, ISP, streaming services or a telecom companies. Even VC fund admin and management are being piped on its platform, for instance, according to Hurst.
“When we initially went to market, we were really concentrated on SaaS, our first vertical,” he stated. “Since then, over 3,000 companies have signed up to use our platform.” Those business vary from early-stage and bootstrapped with $200,000 in revenue to openly traded business.
Pipe’s platform evaluates a customer’s key metrics by integrating with its accounting, payment processing and banking systems. It then instantly rates the efficiency of the business and qualifies them for a trading limitation. Trading limitations currently vary from $50,000 for smaller sized early-stage and bootstrapped business to over $100 million for late-stage and publicly traded business, although there is no cap on how large a trading limitation can be.
“The best way to summarize it is we can deal with any business that has a high degree of predictability around their earnings,”Hurst said. Pipe, he included, intends to turn that month-to-month repeating profits into yearly repeating profits. In the very first quarter of 2021, 10s of countless dollars were traded throughout the Pipeline platform. Between its launch in late June 2020 through year’s end, the business also saw “tens of millions” in trades occur by means of its marketplace.
Tradable ARR on the platform is presently in excess of$1 billion.”We’re helping business grow on their own terms, “Hurst said.”Or, you might say we’re building the Nasdaq for profits. Virtually every company worldwide has a repeating income model currently, or if they don’t, they’re considering how they can move to it.”