Pipe is an online lending platform that helps businesses, founders, and entrepreneurs convert recurring revenue into up-front capital without restrictions or equity dilution.
Over 8,000 companies have joined the Pipe trading platform, with over 50% of the trading volume based in non-SaaS markets, property management, service-based businesses, etc. (Source - July 2022).
About Pipe
Based in Miami, Florida, Pipe is a global trading company that helps businesses with recurring revenue streams. Pipe was founded in September 2019 by Harry Hurst, Josh Mangel, and Zain Allarakhia. It enables SaaS companies to access their revenue upfront by connecting them with investors who exchange discounted rates for the yearly value of a company’s contracts.
Pipe has a 20+ person team and has raised $316M in funding over 5 rounds. (Source - July 2022). Currently, Pipe’s marketplace hosts over $1 billion in tradeable annual recurring revenue (ARR) while tens of millions of dollars are traded monthly on Pipe.
Eligibility and Products Offered
Companies with recurring revenue looking to grow are eligible to sign up with Pipe.
Pipe’s platform hosts different types of businesses, including SaaS companies, D2C subscription businesses, media and entertainment, and service businesses. It is available to companies headquartered in the U.S. or UK.
Its terms and conditions state that its services are not intended for sole traders but for companies with recurring revenues and in good standing in jurisdictions they are registered in. It may also terminate access and use of service for companies that violate its terms and conditions. (Source - July 2022)
Investors compete against one another on the platform without cost capital, while Pipe demands a fixed trading fee from each party of up to 1% (Source - July 2022).
Pipe distinguishes itself from many financial platforms as a non-lending platform. It doesn't raise money to lend to consumers. Instead, it links them to institutional investors for the most profitable pricing to trade their contracts.
The trading limit is determined by a company’s recurring revenue and business health. That way, the trading limit grows as the business scales. Trading limits can range from $25,000 to $100M USD. (Source - July 2022)
How to Apply
The approval process takes between 2 hours to 2 days after the signup process. After approval and other necessary steps, however, the funds can be transferred to your bank account instantly. (Source - July 2022)
Capchase vs. Pipe
In addition to financing using from Pipe, founders and startups can work with Capchase. When compared to Pipe, Capchase’s funding model is designed to remove excess fees that can save clients up to 50% when compared to traditional venture debt providers (Source – June 2022).
It can be helpful to see the differences between Capchase and Pipe side-by-side. This is especially true for key areas like speed to funding, flexibility, structure & fees, and value add.
Speed
Capchase
48 hours to underwrite (led by a tech-driven & highly responsive underwriting system)
Pipe
Variable: companies must wait to receive an offer from an interested investor
Flexibility
Capchase
Highly Flexible: No traditional financial covenants on amounts financed
Pipe
Fairly flexible: No minimum net worth, working capital, current ratio, quick asset ratio, liquidity ratio, or debt-to-equity ratio is required to apply
Structure & Fees
Capchase
Transparent & Simple: No prepayment fees, closing fees, warrants, or hidden fees
Pipe
May include terms around prepayment, expensive closing process, warrants, admin fees
Value Add
Capchase
A prescriptive funding plan
Pipe
Discrete funding events
